Exam 10: Economic Analysis of Financial Regulation

When bad drivers line up to purchase collision insurance,automobile insurers are subject to the ________.

Banking crises have occurred throughout the world.What similarities do we find when we look at the different countries?

Although the CDIC was created to prevent bank failures,its existence encourages banks to ________.

Deposit insurance is a guarantee by the CDIC to pay deposits off in full on the first ________ they have deposited in the bank.

In terms of international banking crises,deposit insurance ________.

The bailout of the savings and loan industry was much delayed and,therefore,much more costly to taxpayers because ________.

One of the reasons for the failure of Canadian Commercial and Northland banks was ________.

Since depositors,like any lender,only receive fixed payments while the bank keeps any surplus profits,they face the ________ problem that banks may take on too ________ risk.

When depositors lack of information about the quality of bank assets it can lead to ________.

Bank examiners include ________.

As in the United States,an important factor in the banking crises in Norway,Sweden,and Finland was the ________.

The evidence from banking crises in other countries indicates that ________.

According to CDIC risk profiles,________.

The Basel Accord requires banks to hold as capital an amount that is at least ________ of their risk-weighted assets.

The chartering process is similar to ________ potential borrowers and the restriction of risk assets by regulators is similar to ________ in private financial markets.

The policy of ________ exacerbated ________ problems as savings and loans took on increasingly huge levels of risk on the slim chance of returning to solvency.

A system of deposit insurance ________.

Banking reform possibilities include ________.

A problem with the too-big-to-fail policy is that it ________ the incentives for ________ by big banks.

The government safety net creates ________ problem because risk-loving entrepreneurs might find banking an attractive industry.