Exam 18: Bank Regulation

The Glass-Steagall Act of 1933 prevented

The Sarbanes-Oxley Act (2002)was enacted in response to some banks taking on too much risk.

Some publicly traded banks have incurred larger reporting expenses as a result of having to comply with the Sarbanes-Oxley Act.

Shareholders and managers of banks may prefer that banks be required to hold higher levels of capital because this would allow for higher share prices for the banks and larger bonuses for bank managers.

Which banking act allowed for the creation of NOW accounts?

Which of the following was NOT achieved by the Depository Institutions Deregulation and Monetary Control Act of 1980?

The Basel III framework proposes

The fair value accounting that is used to value a bank's assets for purposes of meeting capital requirements requires a bank to periodically "mark its assets to market."

A federal bank charter is issued by the

Deposit insurance now covers all bank deposits without any limit.

The ____ is the fund used to cover insured depositors.

The Sarbanes-Oxley Act was enacted to make corporate managers, board members, and auditors more accountable for the accuracy of the financial statements that their respective firms provide.

The liquidity coverage ratio, which is measured under the Basel III guidelines, is the ratio of a bank's _________ to its ___________.

The Financial Services Modernization Act of 1999

Which banking act allowed interstate banking?

When a bank holds a lower level of capital, a given dollar level of profits represents a lower return on equity.

Bank regulations typically

Which of the following is NOT a corrective action that regulators may take when a bank is identified as a problem bank?

In general, a bank defines its value-at-risk as the estimated potential loss from its trading businesses that could result from adverse movements in market prices.

The act of taking on more risk because of protection from adverse consequences due to the risk is referred to as a moral hazard problem.