Exam 13: Regulation of Commercial Banks

The FDIC may require an undercapitalized bank to I. provide the FDIC with a capital restoration plan. II. cease acquiring brokered deposits. III. obtain FDIC approval for all acquisitions. IV. suspend dividends and management fees. V. suspend payments on subordinated debt.

(Multiple Choice)

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Question 21

The Glass-Steagall Act came about due to concerns about excessive risk taking at banks and conflicts of interest between commercial and investment banking activities.

(True/False)

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Question 22

Why have some states placed restrictions on intrastate and interstate branches? What historical laws gave this right to states? What law changed these restrictions?

(Essay)

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Question 23

Tier I (core)capital includes at least some part of which of the following? I. Common stockholders' equity II. Retained earnings III. Subordinated debt IV. Allowance for loan and lease losses

(Multiple Choice)

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Question 24

The ________ introduced the prompt corrective action policy that requires federal intervention when a bank's capital falls below certain minimums.

(Multiple Choice)

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Question 25

The reduction in deposit funds cost to an individual bank brought about by government insurance is an example of the

(Multiple Choice)

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Question 26

A bank that has an equity to asset ratio equal to 12 percent can normally lend no more than ________ of its assets to any one borrower.

(Multiple Choice)

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Question 27

Among other things,the ________ prohibits U.S. banks from providing banking services to foreign shell banks.

(Multiple Choice)

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Question 28

The FDIC insures bank deposits and the OTS insures thrift deposits.

(True/False)

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Question 29

Areas of commercial bank regulation designed to encourage banks to lend to socially important sectors such as housing and farming are termed ________ regulations.

(Multiple Choice)

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Question 30

Why were the FIRREA of 1989 and the FDICIA of 1991 passed? What were their major provisions? How did these laws differ from earlier acts of the 1980s?

(Essay)

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Question 31

The CRA of 1977 and the HMDA of 1975 are examples of consumer protection regulations.

(True/False)

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Question 32

Which act led to interstate banking in the United States?

(Multiple Choice)

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Question 33

A securities subsidiary of a bank holding company that engages in investment banking is called a Riegle-Neal affiliate.

(True/False)

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Question 34

The layers of regulation imposed on banks to protect depositors against bank failure are termed credit allocation regulations.

(True/False)

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Question 35

The law that largely repealed the Depression era banking laws was the

(Multiple Choice)

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Question 36

There were a greater number of bank failures from 1980 to 1990 inclusive than from 1934 to 1979.

(True/False)

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Question 37

Which of the following would increase the value of a bank charter? I. Tightening restrictions on new charters II. Broadening the activities banks can engage in III. Increasing reserve requirements IV. Doubling capital adequacy requirements

(Multiple Choice)

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Question 38

To be well-capitalized,a bank must have a leverage ratio of at least percent,Tier I capital to credit risk-adjusted asset ratio of at least percent,and a total risk-based capital ratio of at least percent.

(Multiple Choice)

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Question 39

In the United States,regulators currently use a ________ to calculate required reserve balances.

(Multiple Choice)

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Question 40

Showing 21 - 40 of 60

Exam 13: Regulation of Commercial Banks

The FDIC may require an undercapitalized bank to I. provide the FDIC with a capital restoration plan. II. cease acquiring brokered deposits. III. obtain FDIC approval for all acquisitions. IV. suspend dividends and management fees. V. suspend payments on subordinated debt.

The Glass-Steagall Act came about due to concerns about excessive risk taking at banks and conflicts of interest between commercial and investment banking activities.

Why have some states placed restrictions on intrastate and interstate branches? What historical laws gave this right to states? What law changed these restrictions?

Tier I (core)capital includes at least some part of which of the following? I. Common stockholders' equity II. Retained earnings III. Subordinated debt IV. Allowance for loan and lease losses

The ________ introduced the prompt corrective action policy that requires federal intervention when a bank's capital falls below certain minimums.

The reduction in deposit funds cost to an individual bank brought about by government insurance is an example of the

A bank that has an equity to asset ratio equal to 12 percent can normally lend no more than ________ of its assets to any one borrower.

Among other things,the ________ prohibits U.S. banks from providing banking services to foreign shell banks.

The FDIC insures bank deposits and the OTS insures thrift deposits.

Areas of commercial bank regulation designed to encourage banks to lend to socially important sectors such as housing and farming are termed ________ regulations.

Why were the FIRREA of 1989 and the FDICIA of 1991 passed? What were their major provisions? How did these laws differ from earlier acts of the 1980s?

The CRA of 1977 and the HMDA of 1975 are examples of consumer protection regulations.

Which act led to interstate banking in the United States?

A securities subsidiary of a bank holding company that engages in investment banking is called a Riegle-Neal affiliate.

The layers of regulation imposed on banks to protect depositors against bank failure are termed credit allocation regulations.

The law that largely repealed the Depression era banking laws was the

There were a greater number of bank failures from 1980 to 1990 inclusive than from 1934 to 1979.

Which of the following would increase the value of a bank charter? I. Tightening restrictions on new charters II. Broadening the activities banks can engage in III. Increasing reserve requirements IV. Doubling capital adequacy requirements

To be well-capitalized,a bank must have a leverage ratio of at least ________ percent,Tier I capital to credit risk-adjusted asset ratio of at least ________ percent,and a total risk-based capital ratio of at least ________ percent.

In the United States,regulators currently use a ________ to calculate required reserve balances.

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

To be well-capitalized,a bank must have a leverage ratio of at least percent,Tier I capital to credit risk-adjusted asset ratio of at least percent,and a total risk-based capital ratio of at least percent.