Exam 14: Banking and Financial Services: Regulations, Operations, and Trends

Recent changes in the banking community have caused:

Bank loans to businesses have tended to become shorter in maturity.

All of the following are reasons U.S. banks have expanded overseas except:

The economic integration of Europe under the EC should result in fewer bank mergers.

Which of the following statements describes why the American banking industry has experienced an extremely low failure rate?

Just prior to the credit crisis of 2007-2009 bankers are willing to accept greater risk in their operations.

Bank holding companies approved to offer corporate underwriting services in the U.S. cannot generate revenues from this activity greater than 10 percent of all revenues flowing through their underwriting subsidiary.

The majority of U.S. banks are insured and are members of the Federal Reserve System.

According to the text a bank reaching approximately $100 million in total assets will usually find that its production costs stop declining and level out.

Reserves withdrawn from the banking system will cause a contraction of the nation's money supply.

The vast majority of U.S. banks are:

See if you can fill in correctly the missing items from the balance sheet (report of condition) and the statement of earnings and expenses (report of income) of the bank whose financial accounts are listed below:

Which of the items below is not a primary issue facing the management of today's large U.S. bank?

Representative offices of international banks can take deposits from the public.

As far as expenses are concerned, wages and salaries are more important than interest on deposits for U.S. commercial banks.

Commercial banks hold about ____ of the total assets of all financial institutions headquartered in the United States.

Suppose transaction accounts carry a reserve requirement of 10 percent and savings accounts, 3 percent. A commercial bank holds $100 million in savings accounts and $200 million in demand deposits but no other transaction accounts. Its required legal reserve is $39 million.

To provide adequate liquidity most banks hold more cash than necessary to meet their reserve requirements.

The Federal Reserve System has essentially no control over foreign banks operating in the United States.

In order to capture each Bank's loan risk exposure bank balance sheets today frequently include both gross loans and leases or the sum of the face amount of all loans and lease contracts currently outstanding and net loans and leases, which equals gross loans less unearned income and allowance for loan losses.