Test your basic knowledge |

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. Account against which checks convertible to currency can be written






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






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






4. Restricting banks to branches within a single state






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






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






8. 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)






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






10. 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%






11. Protected small banks from large banks






12. Restricting banks to branches within a narrow geographic area






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






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






15. Grade regulators will give after examining a bank






16. Companies that own more than one bank






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






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






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 Repealed Glass- Steagall by allowing ownership of banks by securities and insurance firms and allowed banks to participate in securities - insurance -and real estate






20. Ratios of capital to risk weighted assets






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






22. Germany - France - Luxembourg - Netherlands






23. Restricting bank to a single bank






24. When banks can participate in non-financial activities






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






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






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






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






29. Will reimburse the saver for funds lost






30. 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%






31. Capital to total average assets






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