Test your basic knowledge |

Banking Industry

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. 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%






2. Allowed banks to get around branching restrictions even further (80s-90s)






3. Account against which checks convertible to currency can be written






4. Federal gov't guarantee of certain types of bank deposits






5. Most savings and loan associations are members of the ________






6. Protected small banks from large banks






7. Creation of Federal Reserve System (1913) - Federal Deposit Insurance Corporation (FDIC-1934) - restrictions on bank competition






8. Will reimburse the saver for funds lost






9. Offer some protection against loss but have a limited life and may carry an interest obligation






10. Restricting banks to branches within a single state






11. Grade regulators will give after examining a bank






12. Restricting bank to a single bank






13. Restricting banks to branches within a narrow geographic area






14. Geographic limitations on banks' ability to open more than one office or branch (no longer exist)






15. Most permanent types of capital (common stockholders' equity) ; help absorb loss






16. Ultimate source of credit to banks for panic waves; illiquid loans become collateral in exchange for the cash needed now;






17. Repealed Glass- Steagall by allowing ownership of banks by securities and insurance firms and allowed banks to participate in securities - insurance -and real estate






18. Supervised by Office of Comptroller of the Currency (OCC) in US Treasury department; originally issued banks notes as currency






19. Companies that own more than one bank






20. Push banks to local lending; lower costs of risk -liquidity -and info






21. When banks can participate in non-financial activities






22. Spreading of bad news about one bank to include other banks






23. 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






24. Allowed banks to get around branching restrictions (1950s); large firm with many different banks as subsidiaries






25. Germany - France - Luxembourg - Netherlands






26. Pays off depositors - purchases and assumes control of the bank






27. Capital to total average assets






28. Ratios of capital to risk weighted assets






29. 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)






30. Banks have less ability to diversify assets; raise exposure to credit risk






31. Geographic branching restrictions -restrictions on permissible activities of banks






32. 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%