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How banks are defined in America has changed over time.

Where is the subject for the verb "has"? How is this type of sentence formed?

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[How banks are defined in America] has changed over time.

The bracketed element is a subordinate interrogative clause (embedded question) functioning as subject of the sentence.

The meaning is:

"The answer to the question 'How are banks defined in America?' has changed over time."

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    There is no embedded question. questions follow the format: How are X defined in America?
    – Lambie
    Commented Jul 26, 2020 at 18:21
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    It just is not a question form: How are banks defined? **How banks are defined is x" is not a question.
    – Lambie
    Commented Jul 26, 2020 at 19:21
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    No, that's nonsense. The sine qua non for an interrogative form with be is the inversion. No inversion, no interrogative form.
    – Lambie
    Commented Jul 26, 2020 at 19:27
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    The manner in which banks are defined in America has changed over time. = How banks are defined.
    – Lambie
    Commented Jul 26, 2020 at 19:31
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    @Lambie That's wrong. "How" doesn't occur in fused relatives like that. And FYI subordinate interrogatives don't have inversion with any verb, including "be".
    – BillJ
    Commented Jul 26, 2020 at 19:41
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The subject is "How banks are defined in America".

The sentence is formed in the common sentence order subject-verb-object (or SVO), except that there is no object in this sentence, so it is just subject-verb. A similar but simpler sentence would be something like "He has changed over time."

The verb "change" is in the present perfect tense "has changed", and "over time" is an adverb modifying the verb.

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    There is no object in this sentence. Just like there is no object in "You've changed!"
    – TonyK
    Commented Jul 27, 2020 at 10:31
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    "changed" is being used as an intransitive verb, so there's no object.
    – Barmar
    Commented Jul 27, 2020 at 14:56
  • rather, there is no object, so "change" is being used as an intransitive verb. But the question wasn't whether "change" is being used as an intransitive verb.
    – Criticizing Israel not allowed
    Commented Jul 27, 2020 at 19:16

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