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Test your basic knowledge |
Banking Industry
Start Test
Study First
Subject
:
industries
Instructions:
Answer 32 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Federal gov't guarantee of certain types of bank deposits
Gramm-Leach-Bliley Financial Services Modernizaton Act of 1999
federal deposit insurance
leverage ratio
branching restrictions
2. Geographic limitations on banks' ability to open more than one office or branch (no longer exist)
benefits of geographic restrictions
lender of last resort
bank holding companies (BHC)
branching restrictions
3. Push banks to local lending; lower costs of risk -liquidity -and info
benefits of geographic restrictions
federally chartered banks (national banks)
unit banking
branching restrictions
4. Ultimate source of credit to banks for panic waves; illiquid loans become collateral in exchange for the cash needed now;
limited branching
CAMELS rating
lender of last resort
Gramm-Leach-Bliley Financial Services Modernizaton Act of 1999
5. Repealed Glass- Steagall by allowing ownership of banks by securities and insurance firms and allowed banks to participate in securities - insurance -and real estate
forms of competitive restriction
Gramm-Leach-Bliley Financial Services Modernizaton Act of 1999
federal deposit insurance
bank holding companies
6. Most savings and loan associations are members of the ________
federal deposit insurance
what banks have to do to avoid prompt corrective action
federally chartered banks (national banks)
Federal Home Loan Bank System (FHLBs)
7. Capital to total average assets
branching restrictions
forms of state branching regulations
leverage ratio
Federal Home Loan Bank System (FHLBs)
8. Will reimburse the saver for funds lost
federal deposit insurance
bank holding companies
Tier 2 capital
forms of competitive restriction
9. Total capital must exceed 6% of total risk-weighted assets adn Tier 1 capital must exceed 3% of total risk-weighted assets; leverage ration must exceed 4%
ways FDIC handles bank failures
what banks have to do to avoid prompt corrective action
branching restrictions
disadvantages of geographic restrictions
10. Allowed banks to get around branching restrictions even further (80s-90s)
statewide branching
forms of competitive restriction
automated teller machines (ATMS)
risk based capital requirement
11. Pays off depositors - purchases and assumes control of the bank
ways FDIC handles bank failures
federal deposit insurance
universal banking
lender of last resort
12. Supervised by Office of Comptroller of the Currency (OCC) in US Treasury department; originally issued banks notes as currency
Tier 2 capital
Tier 1 capital
federally chartered banks (national banks)
what banks have to do to avoid prompt corrective action
13. When banks can participate in non-financial activities
universal banking
demand deposit
benefits of competitive restrictions
risk based capital requirement
14. Ratios of capital to risk weighted assets
benefits of geographic restrictions
branching restrictions
risk based capital requirement
what banks need to be well capitalized
15. Germany - France - Luxembourg - Netherlands
countries that allow full universal banking
forms of state branching regulations
Federal Home Loan Bank System (FHLBs)
Gramm-Leach-Bliley Financial Services Modernizaton Act of 1999
16. Restricting bank to a single bank
regulatory interventions that have shaped the modern banking industry
benefits of competitive restrictions
statewide branching
unit banking
17. Restricting bank to a single bank (unit banking) -restricting banks to branches within a narrow geographic area (limited branching) -restricting banks to branches within a single state (statewide branching)
automated teller machines (ATMS)
forms of state branching regulations
regulatory interventions that have shaped the modern banking industry
what banks need to be well capitalized
18. Offer some protection against loss but have a limited life and may carry an interest obligation
benefits of competitive restrictions
CAMELS rating
Tier 2 capital
unit banking
19. Made after several bank failures - began insuring deposits up to $2500 - now insures up to $100 - 000 - allows banks to hold less equity capital and earn higher returns FDIC
risk based capital requirement
contagion
Federal Deposit Insurance Corporation
CAMELS rating
20. Companies that own more than one bank
Federal Deposit Insurance Corporation
automated teller machines (ATMS)
regulatory interventions that have shaped the modern banking industry
bank holding companies
21. Most permanent types of capital (common stockholders' equity) ; help absorb loss
regulatory interventions that have shaped the modern banking industry
Tier 1 capital
disadvantages of geographic restrictions
automated teller machines (ATMS)
22. Geographic branching restrictions -restrictions on permissible activities of banks
Federal Home Loan Bank System (FHLBs)
Tier 2 capital
bank holding companies
forms of competitive restriction
23. Creation of Federal Reserve System (1913) - Federal Deposit Insurance Corporation (FDIC-1934) - restrictions on bank competition
lender of last resort
regulatory interventions that have shaped the modern banking industry
Tier 2 capital
benefits of geographic restrictions
24. Protected small banks from large banks
branching restrictions
benefits of competitive restrictions
forms of state branching regulations
Tier 2 capital
25. Total of capital of at least 10% of risk-weighted assets and Tier 1 capital of at least 6% of risk-weighted assets; leverage ratio must exceed 5%
what banks need to be well capitalized
disadvantages of geographic restrictions
contagion
ways FDIC handles bank failures
26. Spreading of bad news about one bank to include other banks
what banks have to do to avoid prompt corrective action
contagion
bank holding companies (BHC)
risk based capital requirement
27. Allowed banks to get around branching restrictions (1950s); large firm with many different banks as subsidiaries
risk based capital requirement
branching restrictions
federal deposit insurance
bank holding companies (BHC)
28. Restricting banks to branches within a narrow geographic area
regulatory interventions that have shaped the modern banking industry
limited branching
lender of last resort
benefits of geographic restrictions
29. Restricting banks to branches within a single state
leverage ratio
statewide branching
federally chartered banks (national banks)
federal deposit insurance
30. Grade regulators will give after examining a bank
automated teller machines (ATMS)
CAMELS rating
disadvantages of geographic restrictions
what banks have to do to avoid prompt corrective action
31. Account against which checks convertible to currency can be written
statewide branching
demand deposit
Gramm-Leach-Bliley Financial Services Modernizaton Act of 1999
forms of competitive restriction
32. Banks have less ability to diversify assets; raise exposure to credit risk
regulatory interventions that have shaped the modern banking industry
universal banking
disadvantages of geographic restrictions
branching restrictions