Exam 2: Financial Services: Depository Institutions

FIs typically provide secondary claims to household savers that have inferior liquidity than primary securities of corporations such as equity and bonds.

As of 2015,commercial banks with over $10 billion in assets constituted approximately ____ percent of the industry assets and numbered approximately _____.

Most of the change in the number of commercial banks since 1990 has been due to bank failures.

Savings banks and savings associations are savings institutions;with savings banks serving as the primary providers of residential mortgage loans,and savings associations concentrating on commercial loans and corporate bonds as well as mortgage assets.

Regulation of FIs is an attempt to enhance the social welfare benefits and mitigate the social costs of providing FI services.

Adopting an enterprise risk management approach by an FI is likely to result in all of the following EXCEPT

Compared to the average commercial bank,credit unions tend to have higher overhead expenses per dollar of assets.

A large number of the savings institution failures during the in the 1980s was a result of

As a result of adopting an enterprise risk management approach,an FI will invest heavily in advanced risk measurement and management systems and practices.

Why do households prefer to use FIs as intermediaries to invest their surplus funds?

The Depository Institutions Deregulation and Monetary Control Act (DIDMCA)of 1980 and the Garn-St.Germain Depository Institutions Act (DIA)of 1982 were the initial laws that began deregulation of the commercial banking industry.

In recent years,the number of commercial banks in the U.S.has been increasing.

For the following problems, choose among the following major banking laws. -This legislation limited thrift investments in non-residential real estate.

Depository financial institutions include all of the following EXCEPT

Commercial banks and finance companies have traditionally served the needs of the residential real estate market.

An FI is exposed to liquidity risk because the average maturity of assets and the average maturity of liabilities are often different on the FIs balance sheet.

Which of the following is true of off-balance-sheet activities?

As DIs made a shift from an "originate-to-hold" banking model to an "originate-to-distribute" model over the last decade,

Verifying the minimum level of capital or equity that must be held to fund the operations of an FI is part of the goal of

Compared to banks and savings institutions,credit unions are able to pay a higher rate on the deposits of members because