Exam 2: Financial Services: Depository Institutions

Prior to the financial crisis of 2008, the return on equity for small community banks had been larger than for large money center banks.

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

The largest liability on credit unions' balance sheet as of September 30, 2012 was

Lehman Brothers failed during the recent financial crisis despite having access to the low cost sources of funds offered by the Federal Reserve.

Large banks tend to make business decisions based on personal knowledge of customers creditworthiness and business conditions in the local communities.

National-chartered commercial banks are most likely to be regulated by

Choose among the following major banking laws. -This legislation limited thrift investments in non-residential real estate.

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.

The largest liability on FDIC-insured savings institutions' balance sheet as of year-end 2012 was

Choose among the following major banking laws. -This legislation sought to limit the growth of non-bank banks.

The movement of an off-balance-sheet asset or liability to an on-balance-sheet item is dependent on the occurrence of a contingent event.

One of the primary reasons that investment banks were allowed to convert to bank holding companies during the recent financial crisis was recognition that

A significant disadvantage for credit unions in competing with commercial banks is the severe restriction in the variety of products and services that they can offer.

Customer deposits are classified on a DI's balance sheet as

As a percent of total assets, savings institutions hold lower amounts of cash and U.S. Treasury securities than commercial banks.

Credit unions operate on a common bond principle which emphasizes the depository and lending needs of credit union members.

Savings associations and savings banks are chartered and regulated by the Federal Reserve Bank.

Choose among the following major banking laws. -This legislation introduced risk based deposit insurance premiums.

The largest liability on U.S. commercial banks' balance sheet as of September 30. 2012 was

The growth of the commercial paper market has led to a decline in the demand for business loans from commercial banks.