Exam 11: Commercial Banks: Industry Overview

A contingent item that may eventually be placed on the right-hand side of the balance sheet or expensed on the income statement is a(n)

Commercial banks are the ________ financial intermediary in the United States as measured by asset size.

State chartered banks ________ be members of the Federal Reserve System and nationally chartered banks ________ be members of the Federal Reserve System.

International expansion for financial institutions coming from highly integrated countries maximizes the risk diversification.

Banking may be subdivided into at least three categories of banks. Match the definitions with the appropriate name. I. A bank that specializes in retail or consumer banking in a local market II. A bank that engages in a complete array of wholesale commercial banking activities and usually also provides retail banking services III. A bank that is located in a financial center and relies on nondeposit or borrowed sources of funds for a significant portion of its liabilities

Advantages of going global for U.S. banks include all but which one of the following?

Since 1980,the number of banks in the United States has been increasing dramatically due to deregulation of the industry.

Business loans have dropped in importance since 1987 as measured by the proportion of these loans on the bank balance sheet.