Question 1

The major provisions of the Competitive Equality in Banking Act of 1987 included

Accepted Answer

A)  abolishing the Federal Home Loan Bank Board and the FSLIC. 
B)  transferring the regulatory role of the Federal Home Loan Bank Board to the Office of Thrift Supervision, a bureau within the U.S. Treasury Department. 
C)  establishing the Resolution Trust Corporation to manage and resolve insolvent thrifts placed in conservatorship or receivership. 
D)  all of the above. 
E)  none of the above. 
A)  abolishing the Federal Home Loan Bank Board and the FSLIC. 
B)  transferring the regulatory role of the Federal Home Loan Bank Board to the Office of Thrift Supervision, a bureau within the U.S. Treasury Department. 
C)  establishing the Resolution Trust Corporation to manage and resolve insolvent thrifts placed in conservatorship or receivership. 
D)  all of the above. 
E)  none of the above.

Question 2

The Competitive Equality in Banking Act of 1987 allowed the FSLIC to borrow all the funds it needed to close insolvent S&Ls and pay off depositors.

Accepted Answer

A) True 
 B)False

Question 3

Savings and loans are not as heavily concentrated in mortgages and have had more flexibility in their investing practices than mutual savings banks.

Accepted Answer

A) True 
 B)False

Question 4

The policy of regulatory forbearance

Accepted Answer

A)  meant delaying the closing of "zombie S&Ls" as their losses mounted during the 1980s. 
B)  benefited "zombie S&Ls" at the expense of healthy S&Ls, as healthy institutions lost deposits to insolvent institutions. 
C)  had the advantage of benefiting healthy S&Ls by giving them the opportunity to attract deposits that began to leave the "zombie S&Ls." 
D)  did both A and B of the above. 
E)  did both A and C of the above. 
A)  meant delaying the closing of "zombie S&Ls" as their losses mounted during the 1980s. 
B)  benefited "zombie S&Ls" at the expense of healthy S&Ls, as healthy institutions lost deposits to insolvent institutions. 
C)  had the advantage of benefiting healthy S&Ls by giving them the opportunity to attract deposits that began to leave the "zombie S&Ls." 
D)  did both A and B of the above. 
E)  did both A and C of the above.

Question 5

What factors contributed to creating the thrift crisis?

Accepted Answer

Several factors contributed to creating

Question 6

Since the early 1990s,the net income of savings and loan associations has ________.

Accepted Answer

A)  risen 
B)  fallen slightly 
C)  fallen sharply 
D)  held steady 
A)  risen 
B)  fallen slightly 
C)  fallen sharply 
D)  held steady

Question 7

Credit unions' main type of loans is ________.

Accepted Answer

A)  mortgages 
B)  automobile 
C)  credit cards 
D)  nonresidential real estate 
A)  mortgages 
B)  automobile 
C)  credit cards 
D)  nonresidential real estate

Question 8

Why did the Competitive Equality in Banking Act of 1987 fail to solve the problems in the thrift industry?

Accepted Answer

The Competitive Equality in Banking Act

Question 9

The largest asset held by S&Ls is ________.

Accepted Answer

A)  consumer loans 
B)  securities 
C)  mortgage loans 
D)  consumer savings 
A)  consumer loans 
B)  securities 
C)  mortgage loans 
D)  consumer savings

Question 10

Explain the advantages and disadvantages between mutual savings banks and savings and loans.

Accepted Answer

Mutual savings banks and savings and loa

Question 11

Charles Keating

Accepted Answer

A)  was allowed to acquire Lincoln Savings and Loan of Irvine, California, even though he had been accused of fraud by the SEC only four-and-a-half years earlier. 
B)  fired Lincoln's conservative lending officers and internal auditors, even though he had promised regulators he would keep them. 
C)  enlisted the help of five senators to delay the seizure of Lincoln's assets. 
D)  did all of the above. 
A)  was allowed to acquire Lincoln Savings and Loan of Irvine, California, even though he had been accused of fraud by the SEC only four-and-a-half years earlier. 
B)  fired Lincoln's conservative lending officers and internal auditors, even though he had promised regulators he would keep them. 
C)  enlisted the help of five senators to delay the seizure of Lincoln's assets. 
D)  did all of the above.

Question 12

The major provisions of the Financial Institutions Reform,Recovery,and Enforcement Act of 1989 included

Accepted Answer

A)  expanding the responsibilities of the FDIC, which is now the sole administrator of the federal deposit insurance system. 
B)  establishing the Resolution Trust Corporation to manage and resolve insolvent thrifts placed in conservatorship or receivership. 
C)  directing the Federal Home Loan Bank Board to continue to pursue regulatory forbearance. 
D)  all of the above. 
E)  only A and B of the above. 
A)  expanding the responsibilities of the FDIC, which is now the sole administrator of the federal deposit insurance system. 
B)  establishing the Resolution Trust Corporation to manage and resolve insolvent thrifts placed in conservatorship or receivership. 
C)  directing the Federal Home Loan Bank Board to continue to pursue regulatory forbearance. 
D)  all of the above. 
E)  only A and B of the above.

Question 13

Since 1990,the number of credit union members has ________.

Accepted Answer

A)  increased substantially 
B)  increased slightly 
C)  decreased substantially 
D)  decreased slightly 
A)  increased substantially 
B)  increased slightly 
C)  decreased substantially 
D)  decreased slightly

Question 14

The policy of regulatory forbearance

Accepted Answer

A)  meant delaying the closing of "zombie S&Ls" as their losses mounted during the 1980s. 
B)  benefited "zombie S&Ls" at the expense of healthy S&Ls, as healthy institutions lost deposits to insolvent institutions. 
C)  contributed to declining profitability in the S&L industry and an increase in the number of "zombie S&Ls." 
D)  did all of the above. 
E)  did only A and B of the above. 
A)  meant delaying the closing of "zombie S&Ls" as their losses mounted during the 1980s. 
B)  benefited "zombie S&Ls" at the expense of healthy S&Ls, as healthy institutions lost deposits to insolvent institutions. 
C)  contributed to declining profitability in the S&L industry and an increase in the number of "zombie S&Ls." 
D)  did all of the above. 
E)  did only A and B of the above.

Question 15

Which of the following is a lender of last resort for credit unions?

Accepted Answer

A)  National Credit Union Administration 
B)  U.S. Central Credit Union 
C)  State central credit unions 
D)  The Central Liquidity Facility 
A)  National Credit Union Administration 
B)  U.S. Central Credit Union 
C)  State central credit unions 
D)  The Central Liquidity Facility

Question 16

How has the thrift industry been transformed since FIRREA?

Accepted Answer

The thrift industry, which primarily con

Question 17

Politicians have ________ incentives to act in their own interests rather than in the interests of taxpayers.

Accepted Answer

A)  no 
B)  strong 
C)  weak 
D)  low 
A)  no 
B)  strong 
C)  weak 
D)  low

Question 18

In the early 1990s,to replenish the reserves of the Savings Association Insurance Fund,insurance premiums for S&Ls were increased from ________ cents per $100 of deposits to ________ cents and can rise as high as 32.5 cents.

Accepted Answer

A)  12.5; 17.5 
B)  17.5; 20.5 
C)  20.8; 23.0 
D)  23.0; 27.8 
A)  12.5; 17.5 
B)  17.5; 20.5 
C)  20.8; 23.0 
D)  23.0; 27.8

Question 19

The smallest average-sized depository institution is ________.

Accepted Answer

A)  credit unions 
B)  savings and loan associations 
C)  commercial banks 
D)  money market mutual funds 
A)  credit unions 
B)  savings and loan associations 
C)  commercial banks 
D)  money market mutual funds

Question 20

The day-to-day liquidity needs of credit unions are met by the ________.

Accepted Answer

A)  National Credit Union Administration 
B)  Federal Reserve System 
C)  state central credit unions 
D)  Central Liquidity Facility 
A)  National Credit Union Administration 
B)  Federal Reserve System 
C)  state central credit unions 
D)  Central Liquidity Facility

Exam 26: Savings Associations and Credit Unions

The major provisions of the Competitive Equality in Banking Act of 1987 included

The Competitive Equality in Banking Act of 1987 allowed the FSLIC to borrow all the funds it needed to close insolvent S&Ls and pay off depositors.

Savings and loans are not as heavily concentrated in mortgages and have had more flexibility in their investing practices than mutual savings banks.

The policy of regulatory forbearance

What factors contributed to creating the thrift crisis?

Since the early 1990s,the net income of savings and loan associations has ________.

Credit unions' main type of loans is ________.

Why did the Competitive Equality in Banking Act of 1987 fail to solve the problems in the thrift industry?

The largest asset held by S&Ls is ________.

Explain the advantages and disadvantages between mutual savings banks and savings and loans.

Charles Keating

The major provisions of the Financial Institutions Reform,Recovery,and Enforcement Act of 1989 included

Since 1990,the number of credit union members has ________.

The policy of regulatory forbearance

Which of the following is a lender of last resort for credit unions?

How has the thrift industry been transformed since FIRREA?

Politicians have ________ incentives to act in their own interests rather than in the interests of taxpayers.

In the early 1990s,to replenish the reserves of the Savings Association Insurance Fund,insurance premiums for S&Ls were increased from ________ cents per $100 of deposits to ________ cents and can rise as high as 32.5 cents.

The smallest average-sized depository institution is ________.

The day-to-day liquidity needs of credit unions are met by the ________.

Why Study Financial Markets and Institutions?

Overview of the Financial System

What Do Interest Rates Mean and What Is Their Role in Valuation?

Why Do Interest Rates Change?

How Do Risk and Term Structure Affect Interest Rates?

Are Financial Markets Efficient?

Why Do Financial Institutions Exist?

Why Do Financial Crises Occur and

Central Banks and the Federal Reserve System

Conduct of Monetary Policy: Tools, Goals, Strategy, and Tactics

The Money Markets

The Bond Market

The Stock Market

The Mortgage Markets

The Foreign Exchange Market

The International Financial System

Banking and the Management of Financial Institutions

Financial Regulation

Banking Industry: Structure and Competition

The Mutual Fund Industry

Insurance Companies and Pension Funds

Investment Banks, Security Brokers and Dealers, and Venture Capital Firms

Risk Management in Financial Institutions

Hedging with Financial Derivatives

Financial Crises In Emerging Market Economies

Finance Companies

Filters

In the early 1990s,to replenish the reserves of the Savings Association Insurance Fund,insurance premiums for S&Ls were increased from cents per $100 of deposits to cents and can rise as high as 32.5 cents.