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