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Banking Industry

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. 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%






2. Restricting bank to a single bank






3. Federal gov't guarantee of certain types of bank deposits






4. Pays off depositors - purchases and assumes control of the bank






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






6. Spreading of bad news about one bank to include other banks






7. Repealed Glass- Steagall by allowing ownership of banks by securities and insurance firms and allowed banks to participate in securities - insurance -and real estate






8. Geographic branching restrictions -restrictions on permissible activities of banks






9. Geographic limitations on banks' ability to open more than one office or branch (no longer exist)






10. Ultimate source of credit to banks for panic waves; illiquid loans become collateral in exchange for the cash needed now;






11. Most permanent types of capital (common stockholders' equity) ; help absorb loss






12. Creation of Federal Reserve System (1913) - Federal Deposit Insurance Corporation (FDIC-1934) - restrictions on bank competition






13. Offer some protection against loss but have a limited life and may carry an interest obligation






14. Push banks to local lending; lower costs of risk -liquidity -and info






15. Restricting banks to branches within a single state






16. Allowed banks to get around branching restrictions (1950s); large firm with many different banks as subsidiaries






17. Companies that own more than one bank






18. Most savings and loan associations are members of the ________






19. Protected small banks from large banks






20. Banks have less ability to diversify assets; raise exposure to credit risk






21. Will reimburse the saver for funds lost






22. Grade regulators will give after examining a bank






23. Capital to total average assets






24. Supervised by Office of Comptroller of the Currency (OCC) in US Treasury department; originally issued banks notes as currency






25. When banks can participate in non-financial activities






26. 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)






27. Ratios of capital to risk weighted assets






28. 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%






29. Allowed banks to get around branching restrictions even further (80s-90s)






30. Germany - France - Luxembourg - Netherlands






31. Restricting banks to branches within a narrow geographic area






32. Account against which checks convertible to currency can be written