Financial Institution Name Institution Financial Institution Question 1 Loophole mining is a term that is used by banks to find their way around regulations set by the government. In most cases, the government might come up with regulations that make it hard for banks to make profits. To guarantee their survival, banks look for ways through which they can defeat these regulations without necessarily breaking the law. This is important for banks as the failure to innovate may make it hard for a bank to stay competitive. An example of loophole mining is derived from the Great Inflation where banks were forbidden by the law to pay any interest on checking deposits or on amounts exceeding percent on time deposits something that was far less than the existing market rates at that time. Banks tried to lure depositors by offering them incentives