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