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 Repealed Glass- Steagall by allowing ownership of banks by securities and insurance firms and allowed banks to participate in securities - insurance -and real estate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