Exam 19: Banking Industry: Structure and Competition

State banks that are not members of the Federal Reserve System are most likely to be examined by the

In the 1950s, the interest rate on three-month Treasury bills fluctuated between 1.0% and 3.5%. In the 1980s, the three-month Treasury bill rate ranged from 5% to over 15%. From this, one could predict that in the 1980s interest-rate risk was ________ and the demand for financial innovation was ________.

The practice of creating marketable debt instruments that are backed by otherwise illiquid assets is known as ________.

The main center of the Eurodollar market is ________.

The presence of so many commercial banks in the United States is most likely the result of

Restrictions on commercial banks' securities and insurance activities put American banks at a competitive disadvantage relative to foreign banks.

When disintermediation occurs, the banking system ________ deposits and bank lending ________.

An alternative corporate structure for U.S. banks that operate overseas is the Edge Act corporation, a special subsidiary engaged primarily in international banking.

A change in the financial environment will stimulate a search by financial institutions for innovations that are likely to be profitable.

In a ________ banking system, commercial banks engage in securities underwriting, but separate subsidiaries conduct the different activities. Also, banking and insurance are not typically undertaken together in this system.

The future structure of the U.S. banking industry is likely to be characterized by many more smaller banks, as customers demand neighborhood banks operated by people they know personally.

As a result of shared electronic banking facilities,

Today, the United States has a dual banking system in which banks supervised by the federal government and banks supervised by the states operate side by side.

Which of the following are important factors in determining the degree and timing of financial innovation?

Which of the following is an advantage of forming a bank holding company?

What is the key difference between an S&L and a mutual savings bank?

A major difference between the United States and Japanese banking systems is that

In September of 2008, the money market mutual fund Reserve Primary Fund had a price of less than $1.00 for a dollar invested. How did this happen?

An electronic machine that allows customers to make deposits, get cash, transfer funds from one account to another, and check balances is

Financial innovation has widened the cost advantages that banks have in acquiring funds, helping to explain why bank profitability has soared in recent years.