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 Repealed Glass- Steagall by allowing ownership of banks by securities and insurance firms and allowed banks to participate in securities - insurance -and real estate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