Question 1

FDIC deposit insurance is generally limited to ________ per depositor per bank.

Accepted Answer

A) $50,000 
B) $100,000 
C) $150,000 
D) $200,000 
E) $250,000 
A) $50,000 
B) $100,000 
C) $150,000 
D) $200,000 
E) $250,000 E

Question 2

The Investment Company Act of 1940 and the Securities Acts of 1933 and 1934 are examples of investor protection regulations.

Accepted Answer

A) True 
 B)False  True

Question 3

Recent regulation such as the Riegle-Neal Act of 1994 has removed some of the federal banking laws that formerly constrained profitable opportunities for commercial banks. The Riegle-Neal Act removes the major restrictions on banks' ability to ________.

Accepted Answer

A) diversify geographically 
B) diversify their product line 
C) engage in securities underwriting 
D) engage in insurance underwriting 
E) engage in loan brokerage 
A) diversify geographically 
B) diversify their product line 
C) engage in securities underwriting 
D) engage in insurance underwriting 
E) engage in loan brokerage A

Question 4

Areas of commercial bank regulation dealing with preventing banks from discriminating unfairly in lending are termed ________ regulations.

Accepted Answer

A) safety and soundness 
B) consumer protection 
C) investor protection 
D) credit allocation 
E) monetary policy 
A) safety and soundness 
B) consumer protection 
C) investor protection 
D) credit allocation 
E) monetary policy

Question 5

A bank holding company that only has one bank is termed a unit bank.

Accepted Answer

A) True 
 B)False

Question 6

A bank has Tier I capital of $90 million and Tier II capital of $70 million. The bank has total assets of $2,522 million and risk-weighted assets of 2,017.6 million. This bank is

Accepted Answer

A) critically undercapitalized. 
B) significantly undercapitalized. 
C) undercapitalized. 
D) adequately capitalized. 
E) well-capitalized. 
A) critically undercapitalized. 
B) significantly undercapitalized. 
C) undercapitalized. 
D) adequately capitalized. 
E) well-capitalized.

Question 7

The difference between the private costs of regulations and the private benefits for the producers of financial services is called the net regulatory burden.

Accepted Answer

A) True 
 B)False

Question 8

Periods of high interest rates create the disintermediation phenomena in commercial banks.

Accepted Answer

A) True 
 B)False

Question 9

U.S. depository institutions may be subject to as many as ________ separate regulators.

Accepted Answer

A) four 
B) five 
C) six 
D) seven 
E) eight 
A) four 
B) five 
C) six 
D) seven 
E) eight

Question 10

Discuss the four layers of regulation designed to preserve the safety and soundness of DIs.

Accepted Answer

-Imposing lending limits that require di

Question 11

Management of liquidity risk is the major reason why commercial banks are subject to reserve requirements.

Accepted Answer

A) True 
 B)False

Question 12

In the post-Depression era the largest number of bank failures occurred in which time period?

Accepted Answer

A) 1955-1965 
B) 1965-1975 
C) 1975-1985 
D) 1985-1995 
E) 1995-2005 
A) 1955-1965 
B) 1965-1975 
C) 1975-1985 
D) 1985-1995 
E) 1995-2005

Question 13

Requiring foreign banks to operate under the same rules as domestic banks is termed

Accepted Answer

A) favored status. 
B) IBA clause. 
C) national treatment. 
D) NAFTA. 
E) post-patriotism requirement. 
A) favored status. 
B) IBA clause. 
C) national treatment. 
D) NAFTA. 
E) post-patriotism requirement.

Question 14

The Financial Services Modernization Act allowed bank holding companies to open insurance underwriting affiliates and allowed insurance companies to open banks.

Accepted Answer

A) True 
 B)False

Question 15

The Financial Services Modernization Act first allowed Section 20 affiliates.

Accepted Answer

A) True 
 B)False

Question 16

All banks located in the European Union offer deposits that are insured for ________ euros,although depositors are subject to a ________ in the event of loss.

Accepted Answer

A) 100,000; 2.5 percent insurance premium 
B) 50,000; 95 percent recovery rate 
C) 50,000; 10 percent deductible 
D) 45,000; 5 percent fine 
E) 75,000; 90 percent recovery rate 
A) 100,000; 2.5 percent insurance premium 
B) 50,000; 95 percent recovery rate 
C) 50,000; 10 percent deductible 
D) 45,000; 5 percent fine 
E) 75,000; 90 percent recovery rate

Question 17

In United States,commercial banks are among the least regulated financial institutions.

Accepted Answer

A) True 
 B)False

Question 18

The average daily net transaction accounts of a local bank during the most recent reserve computation period is $687 million. The amount of average daily reserves at the Fed during the reserve maintenance period is $35.23 million,and the average daily vault cash corresponding to the maintenance period is $12.74 million. What is the average daily reserve balance required to be held by the bank during the maintenance period?

Accepted Answer

A) $40.12 million 
B) $47.79 million 
C) $54.64 million 
D) $60.53 million 
E) $62.34 million 
A) $40.12 million 
B) $47.79 million 
C) $54.64 million 
D) $60.53 million 
E) $62.34 million

Question 19

The quantity of notes and coin in the economy is called inside money but the bulk of the money supply is outside money.

Accepted Answer

A) True 
 B)False

Question 20

A financial service holding company operates a nationally chartered bank,an insurance firm,a securities firm,and a federal savings bank. Who is the primary regulator for this company? Explain.

Accepted Answer

Under the FSMA of 1999,financial conglom

Exam 13: Regulation of Commercial Banks

FDIC deposit insurance is generally limited to ________ per depositor per bank.

The Investment Company Act of 1940 and the Securities Acts of 1933 and 1934 are examples of investor protection regulations.

Recent regulation such as the Riegle-Neal Act of 1994 has removed some of the federal banking laws that formerly constrained profitable opportunities for commercial banks. The Riegle-Neal Act removes the major restrictions on banks' ability to ________.

Areas of commercial bank regulation dealing with preventing banks from discriminating unfairly in lending are termed ________ regulations.

A bank holding company that only has one bank is termed a unit bank.

A bank has Tier I capital of $90 million and Tier II capital of $70 million. The bank has total assets of $2,522 million and risk-weighted assets of 2,017.6 million. This bank is

The difference between the private costs of regulations and the private benefits for the producers of financial services is called the net regulatory burden.

Periods of high interest rates create the disintermediation phenomena in commercial banks.

U.S. depository institutions may be subject to as many as ________ separate regulators.

Discuss the four layers of regulation designed to preserve the safety and soundness of DIs.

Management of liquidity risk is the major reason why commercial banks are subject to reserve requirements.

In the post-Depression era the largest number of bank failures occurred in which time period?

Requiring foreign banks to operate under the same rules as domestic banks is termed

The Financial Services Modernization Act allowed bank holding companies to open insurance underwriting affiliates and allowed insurance companies to open banks.

The Financial Services Modernization Act first allowed Section 20 affiliates.

All banks located in the European Union offer deposits that are insured for ________ euros,although depositors are subject to a ________ in the event of loss.

In United States,commercial banks are among the least regulated financial institutions.

The quantity of notes and coin in the economy is called inside money but the bulk of the money supply is outside money.

A financial service holding company operates a nationally chartered bank,an insurance firm,a securities firm,and a federal savings bank. Who is the primary regulator for this company? Explain.

Introduction

Determinants of Interest Rates

Interest Rates and Security Valuation

The Federal Reserve System, monetary Policy, and Interest Rates

Money Markets

Bond Markets

Mortgage Markets

Stock Markets

Foreign Exchange Markets

Derivative Securities Markets

Commercial Banks: Industry Overview

Commercial Banks Financial Statements and Analysis

Other Lending Institutions: Savings Institutions, credit Unions, and Finance Companies

Insurance Companies

Securities Firms and Investment Banks

Investment Companies

Pension Funds

Types of Risks Incurred by Financial Institutions

Managing Credit Risk on the Balance Sheet

Managing Liquidity Risk on the Balance Sheet

Managing Interest Rate Risk and Insolvency Risk on the Balance Sheet

Managing Risk Off the Balance Sheet With Derivative Securities

Managing Risk Off the Balance Sheet With Loan Sales and Securitization

Filters

All banks located in the European Union offer deposits that are insured for euros,although depositors are subject to a in the event of loss.