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