Question 1

International banking laws may be divided into three categories: regional reciprocal laws, national reciprocal laws, and national laws.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is incorrect.

Accepted Answer

A)  the moral hazard problem refers to the incentive for bank managers to take excessive risk 
B)  market discipline refers to pressure on banks by depositors and other investors to limit risk taking 
C)  regulatory discipline refers to pressure on banks by regulators through risk based deposit insurance and other constraints to reduce bank risk taking 
D)  all of the above are correct. 
A)  the moral hazard problem refers to the incentive for bank managers to take excessive risk 
B)  market discipline refers to pressure on banks by depositors and other investors to limit risk taking 
C)  regulatory discipline refers to pressure on banks by regulators through risk based deposit insurance and other constraints to reduce bank risk taking 
D)  all of the above are correct.

Question 3

Deregulation of banks refers to

Accepted Answer

A)  prices (e.g. interest paid on time deposits) 
B)  products (e.g., investment banking) 
C)  geographic location 
D)  all of the above 
A)  prices (e.g. interest paid on time deposits) 
B)  products (e.g., investment banking) 
C)  geographic location 
D)  all of the above

Question 4

The Omnibus Budget Reconciliation Act of 1993

Accepted Answer

A)  did not grant FDIC insurance coverage to deposits of state and local governments 
B)  encouraged uninsured depositors to evaluate the banks where they held funds 
C)  gave insured depositors a preference in claims over uninsured depositors 
D)  all of the above 
A)  did not grant FDIC insurance coverage to deposits of state and local governments 
B)  encouraged uninsured depositors to evaluate the banks where they held funds 
C)  gave insured depositors a preference in claims over uninsured depositors 
D)  all of the above

Question 5

Section 20 subsidiaries of bank holding companies are involved in

Accepted Answer

A)  investment banking 
B)  trust departments 
C)  foreign exchange 
D)  all of the above 
A)  investment banking 
B)  trust departments 
C)  foreign exchange 
D)  all of the above

Question 6

Prudential regulation refers to enforcement of regulations concerning banking powers.

Accepted Answer

A) True 
 B)False

Question 7

The Federal Deposit Insurance Corporation Improvement Act of 1991 included which of the following.

Accepted Answer

A)  a directive to the FDIC to implement risk based capital requirements 
B)  recapitalization of the bank deposit insurance fund 
C)  addressed "too big to fail" 
D)  all of the above were part of the legislation. 
A)  a directive to the FDIC to implement risk based capital requirements 
B)  recapitalization of the bank deposit insurance fund 
C)  addressed "too big to fail" 
D)  all of the above were part of the legislation.

Question 8

The focus of the Garn-St Germain Depository Institutions Act of 1982 was on savings and loan associations.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is incorrect.

Accepted Answer

A)  banks are regulated to prevent large scales failures 
B)  bank regulations are standardized among the major trading nations 
C)  the immediacy of payment of bank deposits creates an inherent tendency for bank runs 
D)  Banks are private, profit seeking organizations 
A)  banks are regulated to prevent large scales failures 
B)  bank regulations are standardized among the major trading nations 
C)  the immediacy of payment of bank deposits creates an inherent tendency for bank runs 
D)  Banks are private, profit seeking organizations

Question 10

The primary reason for bank regulation is to prevent individual banks from failing.

Accepted Answer

A) True 
 B)False

Question 11

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 included which of the following.

Accepted Answer

A)  a qualified thrift lender test of at least 70 percent of assets in real estate related assets 
B)  prohibition of junk bond holdings 
C)  higher capital requirements 
D)  all of the above are part of the legislation. 
A)  a qualified thrift lender test of at least 70 percent of assets in real estate related assets 
B)  prohibition of junk bond holdings 
C)  higher capital requirements 
D)  all of the above are part of the legislation.

Question 12

Deregulation has three dimensions: price, product, and geographic.

Accepted Answer

A) True 
 B)False

Question 13

The 1980 Depository Institutions Deregulation and Monetary Control Act (DIDMCA) provided for the gradual elimination of interstate restrictions on bank branching powers.

Accepted Answer

A) True 
 B)False

Question 14

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 effectively removed many of the powers that had been granted to savings and loans in the early 1980s.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is incorrect concerning the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Accepted Answer

A)  the legislation sharply reduced the lending power of thrifts 
B)  the legislation created the Office of Thrift Supervision 
C)  the legislation mandated risk based deposit insurance premium 
D)  the legislation increased the capital requirement for thrifts. 
A)  the legislation sharply reduced the lending power of thrifts 
B)  the legislation created the Office of Thrift Supervision 
C)  the legislation mandated risk based deposit insurance premium 
D)  the legislation increased the capital requirement for thrifts.

Question 16

Among the features of the Banking Act of 1933 were the following.

Accepted Answer

A)  the separation of commercial and investment banking 
B)  the creation of the Federal Deposit Insurance Corporation 
C)  the prohibition of payment of interest son demand deposits 
D)  all of the above are part of the legislation 
A)  the separation of commercial and investment banking 
B)  the creation of the Federal Deposit Insurance Corporation 
C)  the prohibition of payment of interest son demand deposits 
D)  all of the above are part of the legislation

Question 17

All bank holding companies, regardless of the charter status of their subsidiary banks are regulated by the Federal Reserve Board.

Accepted Answer

A) True 
 B)False

Question 18

The GLBA eliminated all of the provisions of the Glass-Stegall Act.

Accepted Answer

A) True 
 B)False

Question 19

Net worth certificates

Accepted Answer

A)  are the same as certificates of deposit 
B)  have a maximum interest rate that is limited by Regulation Q 
C)  were created by DIDMICA 
D)  none of the above 
A)  are the same as certificates of deposit 
B)  have a maximum interest rate that is limited by Regulation Q 
C)  were created by DIDMICA 
D)  none of the above

Question 20

Which of the following was not included in the Federal Deposit Insurance Corporation Improvement Act of 1991.

Accepted Answer

A)  a directive to the FDIC to implement risk based deposit insurance premiums 
B)  phased out of "too bid to fail" 
C)  sharp reductions in the lending powers of thrifts 
D)  prompt corrective action for troubled depository institutions. 
A)  a directive to the FDIC to implement risk based deposit insurance premiums 
B)  phased out of "too bid to fail" 
C)  sharp reductions in the lending powers of thrifts 
D)  prompt corrective action for troubled depository institutions.

International banking laws may be divided into three categories: regional reciprocal laws, national reciprocal laws, and national laws.

Which of the following is incorrect.

Deregulation of banks refers to

The Omnibus Budget Reconciliation Act of 1993

Section 20 subsidiaries of bank holding companies are involved in

Prudential regulation refers to enforcement of regulations concerning banking powers.

The Federal Deposit Insurance Corporation Improvement Act of 1991 included which of the following.

The focus of the Garn-St Germain Depository Institutions Act of 1982 was on savings and loan associations.

Which of the following is incorrect.

The primary reason for bank regulation is to prevent individual banks from failing.

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 included which of the following.

Deregulation has three dimensions: price, product, and geographic.

The 1980 Depository Institutions Deregulation and Monetary Control Act (DIDMCA) provided for the gradual elimination of interstate restrictions on bank branching powers.

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 effectively removed many of the powers that had been granted to savings and loans in the early 1980s.

Which of the following is incorrect concerning the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Among the features of the Banking Act of 1933 were the following.

All bank holding companies, regardless of the charter status of their subsidiary banks are regulated by the Federal Reserve Board.

The GLBA eliminated all of the provisions of the Glass-Stegall Act.

Net worth certificates

Which of the following was not included in the Federal Deposit Insurance Corporation Improvement Act of 1991.

Functions and Forms of Banking

Evaluating Bank Performance

Bank Valuation

An Overview of Assetliability Management Alm

Techniques of Assetliability Management: Futures, Options, and Swaps

Investment Management

Credit Evaluation Process

Commercial and Industrial Lending

Real Estate and Consumer Lending

Liquidity Management

Capital Management

Managing Liabilities

Off-Balance Sheet Activities

Securities, Investment Insurance Products

Other Financial Services

Electronic Banking

Global Financial Services

Filters

Exam 2: The Bank Regulatory Environment

International banking laws may be divided into three categories: regional reciprocal laws, national reciprocal laws, and national laws.

Which of the following is incorrect.

Deregulation of banks refers to

The Omnibus Budget Reconciliation Act of 1993

Section 20 subsidiaries of bank holding companies are involved in

Prudential regulation refers to enforcement of regulations concerning banking powers.

The Federal Deposit Insurance Corporation Improvement Act of 1991 included which of the following.

The focus of the Garn-St Germain Depository Institutions Act of 1982 was on savings and loan associations.

Which of the following is incorrect.

The primary reason for bank regulation is to prevent individual banks from failing.

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 included which of the following.

Deregulation has three dimensions: price, product, and geographic.

The 1980 Depository Institutions Deregulation and Monetary Control Act (DIDMCA) provided for the gradual elimination of interstate restrictions on bank branching powers.

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 effectively removed many of the powers that had been granted to savings and loans in the early 1980s.

Which of the following is incorrect concerning the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Among the features of the Banking Act of 1933 were the following.

All bank holding companies, regardless of the charter status of their subsidiary banks are regulated by the Federal Reserve Board.

The GLBA eliminated all of the provisions of the Glass-Stegall Act.

Net worth certificates

Which of the following was not included in the Federal Deposit Insurance Corporation Improvement Act of 1991.

Functions and Forms of Banking

Evaluating Bank Performance

Bank Valuation

An Overview of Assetliability Management Alm

Techniques of Assetliability Management: Futures, Options, and Swaps

Investment Management

Credit Evaluation Process

Commercial and Industrial Lending

Real Estate and Consumer Lending

Liquidity Management

Capital Management

Managing Liabilities

Off-Balance Sheet Activities

Securities, Investment Insurance Products

Other Financial Services

Electronic Banking

Global Financial Services

Filters