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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. Geographic branching restrictions -restrictions on permissible activities of banks
benefits of geographic restrictions
Gramm-Leach-Bliley Financial Services Modernizaton Act of 1999
risk based capital requirement
forms of competitive restriction
2. Companies that own more than one bank
Federal Home Loan Bank System (FHLBs)
unit banking
branching restrictions
bank holding companies
3. Restricting bank to a single bank
disadvantages of geographic restrictions
unit banking
universal banking
federal deposit insurance
4. 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%
lender of last resort
what banks need to be well capitalized
unit banking
Tier 1 capital
5. 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
Federal Home Loan Bank System (FHLBs)
federally chartered banks (national banks)
universal banking
Federal Deposit Insurance Corporation
6. Ultimate source of credit to banks for panic waves; illiquid loans become collateral in exchange for the cash needed now;
lender of last resort
federally chartered banks (national banks)
leverage ratio
federal deposit insurance
7. Allowed banks to get around branching restrictions even further (80s-90s)
contagion
Federal Deposit Insurance Corporation
CAMELS rating
automated teller machines (ATMS)
8. Restricting banks to branches within a single state
limited branching
leverage ratio
statewide branching
benefits of geographic restrictions
9. Banks have less ability to diversify assets; raise exposure to credit risk
countries that allow full universal banking
disadvantages of geographic restrictions
risk based capital requirement
benefits of competitive restrictions
10. Push banks to local lending; lower costs of risk -liquidity -and info
benefits of geographic restrictions
countries that allow full universal banking
what banks have to do to avoid prompt corrective action
forms of competitive restriction
11. Offer some protection against loss but have a limited life and may carry an interest obligation
what banks have to do to avoid prompt corrective action
limited branching
Tier 2 capital
leverage ratio
12. Restricting banks to branches within a narrow geographic area
bank holding companies (BHC)
unit banking
automated teller machines (ATMS)
limited branching
13. Account against which checks convertible to currency can be written
universal banking
Tier 2 capital
countries that allow full universal banking
demand deposit
14. Supervised by Office of Comptroller of the Currency (OCC) in US Treasury department; originally issued banks notes as currency
benefits of competitive restrictions
federally chartered banks (national banks)
lender of last resort
limited branching
15. Will reimburse the saver for funds lost
federal deposit insurance
contagion
Tier 1 capital
CAMELS rating
16. Capital to total average assets
leverage ratio
federally chartered banks (national banks)
regulatory interventions that have shaped the modern banking industry
branching restrictions
17. Protected small banks from large banks
regulatory interventions that have shaped the modern banking industry
bank holding companies
benefits of competitive restrictions
Federal Home Loan Bank System (FHLBs)
18. 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)
forms of state branching regulations
what banks have to do to avoid prompt corrective action
federal deposit insurance
CAMELS rating
19. Federal gov't guarantee of certain types of bank deposits
Federal Deposit Insurance Corporation
statewide branching
federal deposit insurance
benefits of geographic restrictions
20. Creation of Federal Reserve System (1913) - Federal Deposit Insurance Corporation (FDIC-1934) - restrictions on bank competition
CAMELS rating
regulatory interventions that have shaped the modern banking industry
bank holding companies (BHC)
risk based capital requirement
21. When banks can participate in non-financial activities
unit banking
universal banking
Tier 2 capital
Gramm-Leach-Bliley Financial Services Modernizaton Act of 1999
22. Most permanent types of capital (common stockholders' equity) ; help absorb loss
branching restrictions
forms of state branching regulations
Gramm-Leach-Bliley Financial Services Modernizaton Act of 1999
Tier 1 capital
23. Germany - France - Luxembourg - Netherlands
universal banking
regulatory interventions that have shaped the modern banking industry
disadvantages of geographic restrictions
countries that allow full universal banking
24. Most savings and loan associations are members of the ________
automated teller machines (ATMS)
bank holding companies (BHC)
what banks have to do to avoid prompt corrective action
Federal Home Loan Bank System (FHLBs)
25. Repealed Glass- Steagall by allowing ownership of banks by securities and insurance firms and allowed banks to participate in securities - insurance -and real estate
federal deposit insurance
automated teller machines (ATMS)
Gramm-Leach-Bliley Financial Services Modernizaton Act of 1999
contagion
26. Grade regulators will give after examining a bank
CAMELS rating
contagion
disadvantages of geographic restrictions
demand deposit
27. Spreading of bad news about one bank to include other banks
federal deposit insurance
Federal Home Loan Bank System (FHLBs)
automated teller machines (ATMS)
contagion
28. Allowed banks to get around branching restrictions (1950s); large firm with many different banks as subsidiaries
federally chartered banks (national banks)
forms of competitive restriction
disadvantages of geographic restrictions
bank holding companies (BHC)
29. Ratios of capital to risk weighted assets
Tier 2 capital
risk based capital requirement
federal deposit insurance
CAMELS rating
30. Pays off depositors - purchases and assumes control of the bank
branching restrictions
contagion
forms of state branching regulations
ways FDIC handles bank failures
31. 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%
bank holding companies
what banks have to do to avoid prompt corrective action
demand deposit
Gramm-Leach-Bliley Financial Services Modernizaton Act of 1999
32. Geographic limitations on banks' ability to open more than one office or branch (no longer exist)
limited branching
branching restrictions
lender of last resort
universal banking