Exam 12: Financial Crises

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

The growth of the subprime mortgage market led to

When asset prices rise above their fundamental economic values,a(n)________ occurs.

The Dodd-Frank legislation of 2010 permanently increased the federal deposit insurance to

Microprudential supervision focuses on the safety and soundness of

A major disruption in financial markets characterized by sharp declines in asset prices and firm failures is called a

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.

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

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

When housing prices began to decline after their peak in 2006,many subprime borrowers found that their mortgages were "underwater." This meant that

A serious consequence of a financial crisis is

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

The Dodd-Frank bill created an agency to monitor markets for asset price bubbles and the buildup of systemic risk.This agency is called the

The global financial crisis showed the need for increased financial regulation,however,too much or poorly designed regulation could

If mortgage brokers do not make a strong effort to evaluate whether the borrower can pay off a loan,this creates a

Dodd-Frank addressed many of the issues that led to the financial crisis.Which of the following was NOT addressed by Dodd-Frank regulations?

A possible sequence for the three stages of a financial crisis might be ________ leads to ________ leads to ________.

Financial crises in advanced economies might start from a

Macroprudential supervision policies try to prevent a leverage cycle by changing capital requirements so that they ________ during an expansion and ________ during a downturn.

When financial intermediaries deleverage,firms cannot fund investment opportunities resulting in