Exam 11: Economic Analysis of Financial Regulation

Regulations that reduced competition between banks included

Depositors have a strong incentive to show up first to withdraw their funds during a bank crisis because banks operate on a

Moral hazard and adverse selection problems increased in prominence in the 1980s

A system of deposit insurance

The chartering process is especially designed to deal with the ________ problem,and regular bank examinations help to reduce the ________ problem.

If the FDIC decides that a bank is too big to fail,it will use the ________ method,effectively ensuring that ________ depositors will suffer losses.

The contagion effect refers to the fact that

Prior to the 1980s,S&Ls and mutual savings banks were restricted almost entirely to

Because banks engage in regulatory arbitrage,the Basel Accord on risk-based capital requirements may result in

The FDIC must take steps to close down banks whose equity capital is less than ________ of assets.

The result of the too-big-to-fail policy is that ________ banks will take on ________ risks,making bank failures more likely.

The chartering process is similar to ________ potential borrowers and the restriction of risk assets by regulators is similar to ________ in private financial markets.

A bank failure is less likely to occur when

Consumer protection legislation includes legislation to

Regular bank examinations and restrictions on asset holdings help to indirectly reduce the ________ problem because,given fewer opportunities to take on risk,risk-prone entrepreneurs will be discouraged from entering the banking industry.

Competition between banks

During times of financial crisis,mark-to-market accounting

Banks are required to file ________ usually quarterly that list information on the bank's assets and liabilities,income and dividends,and so forth.

All of the following are common to banking crises in different countries except

As in the United States,an important factor in the banking crises in Latin America was the