Question 1

Which of the following is not considered a current regulator of the banking system?

Accepted Answer

A) the Fed 
B) the Securities and Exchange Commission 
C) the Office of the Comptroller of the Currency 
D) the FDIC 
A) the Fed 
B) the Securities and Exchange Commission 
C) the Office of the Comptroller of the Currency 
D) the FDIC B

Question 2

Which of the following is the agency that was in charge of the Resolution Trust Corporation (RTC)?

Accepted Answer

A) the Fed 
B) the Office of Thrift Supervision (OTS) 
C) the FDIC 
D) the FSLIC 
A) the Fed 
B) the Office of Thrift Supervision (OTS) 
C) the FDIC 
D) the FSLIC C

Question 3

Which of the following provides insurance for pension fund benefits?

Accepted Answer

A) the Department of Labor 
B) the Department of the Treasury 
C) the Pension Benefit Guaranty Corporation 
D) the FDIC 
A) the Department of Labor 
B) the Department of the Treasury 
C) the Pension Benefit Guaranty Corporation 
D) the FDIC C

Question 4

The Federal Deposit Insurance Corporation Improvement Act (FDICIA) limited insurance coverage in regular accounts to a maximum of __________ per account until 2010.

Accepted Answer

A) $50,000 
B) $100,000 
C) $200,000 
D) $1,000,000 
A) $50,000 
B) $100,000 
C) $200,000 
D) $1,000,000

Question 5

Insurance companies are regulated by the

Accepted Answer

A) Federal Trade Commission. 
B) FDIC. 
C) Securities and Exchange Commission (SE
C) . 
D) insurance commissioner of the state in which they do business. 
A) Federal Trade Commission. 
B) FDIC. 
C) Securities and Exchange Commission (SE
C) . 
D) insurance commissioner of the state in which they do business.

Question 6

__________ greatly expanded the lending powers of S&Ls and created money market deposit accounts.

Accepted Answer

A) Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  
B) SAIF 
C) The Garn-St. Germain Act 
D) FDIC 
A) Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  
B) SAIF 
C) The Garn-St. Germain Act 
D) FDIC

Question 7

Which of the following changes result in concerns about the adequacy of banking regulation?

Accepted Answer

A) new products and markets 
B) technological change in the delivery of financial services 
C) globalization 
D) All of the above are correct. 
A) new products and markets 
B) technological change in the delivery of financial services 
C) globalization 
D) All of the above are correct.

Question 8

Which of the following did the Basel Accord not do?

Accepted Answer

A) Mandated requirements for core capital and total capital based upon risk-adjusted assets and total assets 
B) Defined core capital as total capital plus supplemental capital (loan loss reserves plus subordinated debt) 
C) Defined core capital as the historical value of outstanding stock plus retained earnings 
D) Defined risk-adjusted assets by assigning different weights to different types of assets, depending on their risk 
A) Mandated requirements for core capital and total capital based upon risk-adjusted assets and total assets 
B) Defined core capital as total capital plus supplemental capital (loan loss reserves plus subordinated debt) 
C) Defined core capital as the historical value of outstanding stock plus retained earnings 
D) Defined risk-adjusted assets by assigning different weights to different types of assets, depending on their risk

Question 9

A financial holding company is a bank holding company that may engage in an even more extensive array of financial and nonfinancial activities than __________.

Accepted Answer

A) nonbanks 
B) traditional bank holding companies 
C) Federal Reserve banks 
D) Both a and c are correct. 
A) nonbanks 
B) traditional bank holding companies 
C) Federal Reserve banks 
D) Both a and c are correct.

Question 10

Which of the following statements about the Community Reinvestment Act of 1977 is false?

Accepted Answer

A) The Community Reinvestment Act is enforced through the denial of bank mergers. 
B) The act encourages banks to discover community needs, create services needed by the community, participate in government-insured lending programs, train employees to be responsive to requirements of the Community Reinvestment Act, and market services directly to low- and moderate-income groups. 
C) The Community Reinvestment Act provides benefits to minority and lower income communities but not to financial intermediaries. 
D) The purpose of the Community Reinvestment Act is to increase the availability of credit to economically disadvantaged areas. 
A) The Community Reinvestment Act is enforced through the denial of bank mergers. 
B) The act encourages banks to discover community needs, create services needed by the community, participate in government-insured lending programs, train employees to be responsive to requirements of the Community Reinvestment Act, and market services directly to low- and moderate-income groups. 
C) The Community Reinvestment Act provides benefits to minority and lower income communities but not to financial intermediaries. 
D) The purpose of the Community Reinvestment Act is to increase the availability of credit to economically disadvantaged areas.

Question 11

A/An _________________________ is a bank holding company that may engage in an even more extensive array of financial and nonfinancial activities than traditional bank holding companies.

Accepted Answer

A) financial holding company 
B) interstate bank 
C) financial intermediary 
D) super bank 
A) financial holding company 
B) interstate bank 
C) financial intermediary 
D) super bank

Question 12

Which of the following is false?

Accepted Answer

A) Regulation must balance the goals of competition and efficiency versus safety and soundness. 
B) Historically, regulation encouraged market segmentation. 
C) The regulatory structure is in the process of ongoing change. 
D) Investment and commercial banking are still separated. 
A) Regulation must balance the goals of competition and efficiency versus safety and soundness. 
B) Historically, regulation encouraged market segmentation. 
C) The regulatory structure is in the process of ongoing change. 
D) Investment and commercial banking are still separated.

Question 13

Limits placed on the interest rate that may be charged for a loan are called

Accepted Answer

A)  usury ceilings. 
B)  Regulation 
C)  Regulation Q. 
D)  universal interest rate requirements. 
A)  usury ceilings. 
B)  Regulation 
C)  Regulation Q. 
D)  universal interest rate requirements.

Question 14

Which of the following acts merged the Savings Association Insurance Fund (SAIF) and the Bank Insurance Fund (BIF)?

Accepted Answer

A) the Glass-Steagall Act 
B) the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMC
A)  
C) the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICI
A)  
D) the Federal Deposit Insurance Reform Act of 2005 
A) the Glass-Steagall Act 
B) the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMC
A)  
C) the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICI
A)  
D) the Federal Deposit Insurance Reform Act of 2005

Question 15

The __________, passed in 1977, attempts to increase the availability of credit to economically disadvantaged areas and to correct alleged discriminatory lending practices.

Accepted Answer

A) Community Reinvestment Act 
B) Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  
C) Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  
D) Interstate Banking and Branching Efficiency Act (IBBE
A)  
A) Community Reinvestment Act 
B) Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  
C) Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  
D) Interstate Banking and Branching Efficiency Act (IBBE
A)

Question 16

Which of the following is a current regulator of banks?

Accepted Answer

A) the Fed 
B) the Securities and Exchange Commission 
C) the Office of Thrift Supervision 
D) the Resolution Trust Corporation 
A) the Fed 
B) the Securities and Exchange Commission 
C) the Office of Thrift Supervision 
D) the Resolution Trust Corporation

Question 17

Which of the following is considered a monetary control measure covered by the Depository Institutions Deregulation and Monetary Control Act (DIDMCA)?

Accepted Answer

A) the phasing out of Regulation Q 
B) uniform reserve requirements 
C) suspension of state maximum interest rates on loans 
D) All of the above are correct. 
A) the phasing out of Regulation Q 
B) uniform reserve requirements 
C) suspension of state maximum interest rates on loans 
D) All of the above are correct.

Question 18

The Resolution Trust Corporation (RTC) was created to

Accepted Answer

A) provide deposit insurance for thrift intermediaries. 
B) provide deposit insurance for S&Ls. 
C) regulate credit unions. 
D) dispose of the properties of the failed S&Ls. 
A) provide deposit insurance for thrift intermediaries. 
B) provide deposit insurance for S&Ls. 
C) regulate credit unions. 
D) dispose of the properties of the failed S&Ls.

Question 19

Which of the following was set up by the financial options industry for self-regulation?

Accepted Answer

A) the Securities and Exchange Commission 
B) the Federal Trade Commission 
C) the National Options Association 
D) the Options Clearing Corporation 
A) the Securities and Exchange Commission 
B) the Federal Trade Commission 
C) the National Options Association 
D) the Options Clearing Corporation

Question 20

The original purpose of the Community Reinvestment Act was to

Accepted Answer

A) increase the availability of credit to economically disadvantaged areas. 
B) provide low interest loans to small business. 
C) correct alleged discriminatory lending practices. 
D) Both a and c are correct. 
A) increase the availability of credit to economically disadvantaged areas. 
B) provide low interest loans to small business. 
C) correct alleged discriminatory lending practices. 
D) Both a and c are correct.

Exam 12: Regulation of the Banking System and the Financial Services Industry

Which of the following is not considered a current regulator of the banking system?

Which of the following is the agency that was in charge of the Resolution Trust Corporation (RTC)?

Which of the following provides insurance for pension fund benefits?

The Federal Deposit Insurance Corporation Improvement Act (FDICIA) limited insurance coverage in regular accounts to a maximum of __________ per account until 2010.

Insurance companies are regulated by the

__________ greatly expanded the lending powers of S&Ls and created money market deposit accounts.

Which of the following changes result in concerns about the adequacy of banking regulation?

Which of the following did the Basel Accord not do?

A financial holding company is a bank holding company that may engage in an even more extensive array of financial and nonfinancial activities than __________.

Which of the following statements about the Community Reinvestment Act of 1977 is false?

A/An _________________________ is a bank holding company that may engage in an even more extensive array of financial and nonfinancial activities than traditional bank holding companies.

Which of the following is false?

Limits placed on the interest rate that may be charged for a loan are called

Which of the following acts merged the Savings Association Insurance Fund (SAIF) and the Bank Insurance Fund (BIF)?

The __________, passed in 1977, attempts to increase the availability of credit to economically disadvantaged areas and to correct alleged discriminatory lending practices.

Which of the following is a current regulator of banks?

Which of the following is considered a monetary control measure covered by the Depository Institutions Deregulation and Monetary Control Act (DIDMCA)?

The Resolution Trust Corporation (RTC) was created to

Which of the following was set up by the financial options industry for self-regulation?

The original purpose of the Community Reinvestment Act was to

Introduction and Overview

Money and Its Role in the Economy

The Overseer: the Federal Reserve System

Financial Markets, Instruments, and Market Makers

Interest Rates and Bond Prices

The Structure of Interest Rates

Market Efficiency and the Flow of Funds Among Sectors

An Introduction to Financial Intermediaries and Risk

Commercial Banking Structure, Regulation, and Performance

Financial Innovation

Financial Instability and Strains on the Financial System

The Debt Markets

The Stock Market

Securities Firms, Mutual Funds, and Financial Conglomerates

How Exchange Rates Are Determined

Forward, Futures, and Options Agreements

The International Financial System

The Fed, Depository Institutions, and the Money Supply Process

The Demand for Real Money Balances and Market Equilibrium

Financial Aspects of the Household, Business, Government, and Rest-Of-The-World Sectors

Aggregate Demand and Aggregate Supply

The Challenges of Monetary Policy

The Process of Monetary Policy Formation

Policy Implementation

Monetary Policy in a Globalized Financial System

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