Exam 14: The Commercial Banking Industry: Structure, Products, and Management

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Under the terms of the Maastricht Treaty the European Community (EC) is supposed to have a single currency and central bank.

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Question 1

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Approximately ____ percent of all U.S. banks are branch banking organizations.

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Question 2

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What are a bank's principal revenue and expense items?

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Question 3

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The principal revenue item is interest and fees on loans, comprising about two-thirds of all revenues. The second most important revenue item is interest and dividends on investment securities held. Earnings from trust activities and service charges on deposit accounts are minor sources of income, but these so-called "fee income"
sources are growing rapidly as banks endeavor to reduce their heavy dependence on loans and diversify their service menus.
The largest expense item is interest on deposits followed by salaries and wages of employees. Interest on nondeposit funds, such as federal funds and long-term borrowing, is becoming increasingly important as an expense item (especially among the largest banks).

Approximately 98 percent of all commercial bank deposits are covered by the Federal Deposit Insurance Corporation.

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Question 4

How numerous are bank failures and what seem to be their most important causes?

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Question 5

Customers have not readily accepted POS terminals because:

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Question 6

Collateralized mortgage obligations allow banks to invest in a marketable, diversified pool of mortgage loans.

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Question 7

Investment banks accept deposits, but make only commercial loans.

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Question 8

All national banks must be insured by the Federal Deposit Insurance Corporation but have a choice as to whether or not to join the Federal Reserve System.

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Question 9

U.S. Treasury securities are attractive to banks because of their high yields compared to most other securities.

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Question 10

Between 1984 and 2005 the US banking industry's assets accounted for by the smallest banks, each with less than $1 billion in assets, fell from 23% to

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Question 11

Is the ability of banks to create money of significance for the economy and the creation of new jobs?

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Question 12

What is consolidation in banking? What appears to be driving this particular trend in the banking industry?

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Question 13

Bank holding companies control over 90 percent of U.S. bank assets.

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Question 14

Between 1984 and 2005 the largest banks, with more than $25 billion in assets, raised their industry market share from around 40% to more than an

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Question 15

How are banks able to create money?

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Question 16

The primary reasons why the American banking industry has experienced an extremely low failure rate are that:

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Question 17

In recent years the proportion of bank loans with floating as opposed to fixed interest rates declined, while the average maturity of loans (particularly commercial loans) rose.

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Question 18

Between 1984 and 2005 the largest banks, with more than $25 billion in assets, saw their industry market share grow from 40% to more than 76%.

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Question 19

What are the principal uses of commercial bank funds? Major sources of funds?

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Question 20

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Exam 14: The Commercial Banking Industry: Structure, Products, and Management

Under the terms of the Maastricht Treaty the European Community (EC) is supposed to have a single currency and central bank.

Approximately ____ percent of all U.S. banks are branch banking organizations.

What are a bank's principal revenue and expense items?

Approximately 98 percent of all commercial bank deposits are covered by the Federal Deposit Insurance Corporation.

How numerous are bank failures and what seem to be their most important causes?

Customers have not readily accepted POS terminals because:

Collateralized mortgage obligations allow banks to invest in a marketable, diversified pool of mortgage loans.

Investment banks accept deposits, but make only commercial loans.

All national banks must be insured by the Federal Deposit Insurance Corporation but have a choice as to whether or not to join the Federal Reserve System.

U.S. Treasury securities are attractive to banks because of their high yields compared to most other securities.

Between 1984 and 2005 the US banking industry's assets accounted for by the smallest banks, each with less than $1 billion in assets, fell from 23% to

Is the ability of banks to create money of significance for the economy and the creation of new jobs?

What is consolidation in banking? What appears to be driving this particular trend in the banking industry?

Bank holding companies control over 90 percent of U.S. bank assets.

Between 1984 and 2005 the largest banks, with more than $25 billion in assets, raised their industry market share from around 40% to more than an

How are banks able to create money?

The primary reasons why the American banking industry has experienced an extremely low failure rate are that:

In recent years the proportion of bank loans with floating as opposed to fixed interest rates declined, while the average maturity of loans (particularly commercial loans) rose.

Between 1984 and 2005 the largest banks, with more than $25 billion in assets, saw their industry market share grow from 40% to more than 76%.

What are the principal uses of commercial bank funds? Major sources of funds?

Functions and Roles of the Financial System in the Global Economy

Financial Assets, Money, Financial Transactions, and Financial Institutions

The Financial Information Marketplace

The Future of the Financial System and the Money and Capital Markets

The Determinants of Interest Rates: Competing Ideas

Measuring and Calculating Interest Rates and Financial Asset Prices

Inflation and Deflation, Yield Curves, and Duration: Impact on Interest Rates and Asset Prices

The Risk Structure of Interest Rates: Defaults, Prepayments, Taxes, and Other Rate-Determining Factors

Interest-Rate Forecasting and Hedging: Swaps, Financial Futures, and Options

Introduction to the Money Market and the Roles Played by Governments and Security Dealers

Commercial Banks, Major Corporations, and Federal Credit Agencies in the Money Market

Roles and Services of the Federal Reserve and Other Central Banks Around the World

The Tools and Goals of Central Bank Monetary Policy

Nonbank Thrift Institutions: Savings and Loans, Savings Banks, Credit Unions, and Money Market Funds

Mutual Funds, Insurance Companies, Investment Banks, and Other Financial Firms

Regulation of the Financial Institutions Sector

Federal, State, and Local Governments Operating in the Financial Markets

Business Borrowing: Corporate Bonds, Asset-Backed Securities, Bank Loans, and Other Forms of Business Debt

The Market for Corporate

Consumer Lending and Borrowing

The Residential Mortgage Market Stock

International Transactions and Currency Values

International Banking

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