Exam 12: Financial Crises

If uncertainty about banks' health causes depositors to begin to withdraw their funds from banks,the country experiences a(n)

Each year banks with assets over $10 billion are subject to an assessment of the sufficiency of their bank capital under severe macroeconomic conditions called a

________ are asymmetric information problems that act as a barrier to efficient allocation of capital.

In order to ensure that borrowers have an ability to repay residential mortgages,the new consumer protection legislation requires lenders to do all of the following EXCEPT

A financial crisis occurs when an increase in asymmetric information from a disruption in the financial system

Agency problems in the subprime mortgage market included all of the following EXCEPT

Microprudential supervision focuses on the safety and soundness of

Microprudential supervision does all of the following EXCEPT

The Volcker Rule addresses the off-balance-sheet problem involving

Financial crises in advanced economies might start from a

When financial institutions go on a lending spree and expand their lending at a rapid pace they are participating in a

A substantial decrease in the aggregate price level that reduces firms' net worth may stall a recovery from a recession. This process is called

The global financial crisis of 2007-2009 not only led to a worldwide recession,but also a ________ in the European nations that use the euro currency.

The ________,the difference between the interest rate on Baa corporate bonds and U.S. Treasury bonds. rose sharply during the Great Depression.

A ________ pays out cash flows from a collection of assets in different tranches,with the highest-rated tranch paying out first,while lower ones paid out less if there are losses on the underlying assets.

Most U.S. financial crises have started during periods of ________ either after the start of a recession,a stock market crash,or the failure of a major financial institution.

The originate-to-distribute business model has a serious ________ problem since the mortgage broker has little incentive to make sure that the mortgagee is a good credit risk.

________ is a process of bundling together smaller loans (like mortgages)into standard debt securities.

The government passed the Economic Recovery Act in October 2008 to prevent the financial crisis from continuing to worsen. A controversial component of this act was the

The new Consumer Financial Protection Bureau is an independent agency but is funded and housed within