Exam 2: Financial Services: Depository Institutions

The Financial Institutions Reform Recovery and Enforcement Act (FIRREA)of 1989 introduced the qualified thrift lender test (QTL),which set the percentage of assets required for qualification to be no less than

The purpose of guaranty funds in safety and soundness regulation is to protect claim-holders when an FI collapses or fails.

The growth in off-balance-sheet activities during the decade of the 1990s was due,in large part,to the use of derivative contracts.

Which of the following is NOT a major function of financial intermediaries?

Which of the following groups of FIs have experienced the highest percentage growth in assets in the U.S.financial services industry during the past sixty years?

The federal government has traditionally extended safety nets to DIs consisting of

The most numerous of the institutions that define the depository institutions segment of the FI industry in the U.S.is(are)

Retail nontransaction savings and time deposits comprise the largest portion of deposits for commercial banks.

Secondary securities are securities that serve as collateral for primary securities.

Each of the following is a special function performed by FIs at a macro level EXCEPT

The maturity structure of the assets of commercial banks tends to be shorter than the maturity structure of liabilities.

The primary objective of the 1933 Glass-Steagall Act was to prevent commercial banks from competing directly with commercial insurance companies.

The Federal Reserve mandates reserve requirements for depository institutions so that the DIs may provide payment services for the U.S.economy.

Commercial banks that have invested in Internet and mobile banking services and products have significantly outperformed those banks that have chosen to avoid these markets.

For the following problems, choose among the following major banking laws. -This legislation introduced prompt corrective action requiring mandatory intervention by regulators when a bank's capital falls below certain levels.

If not done by FIs,the process of monitoring the actions of borrowers would reduce the attractiveness and increase the risk of investing in corporate debt and equity by individuals.

The Community Reinvestment Act and the Home Mortgage Disclosure Act were both passed to provide incentives to comply with

The future viability of the savings association industry in traditional mortgage lending has been questioned because of

Financial intermediaries are

Because of the large amount of equity on a typical commercial bank balance sheet,credit risk is not a significant risk to bank managers.