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