Question 1

The Garn-St. Germain Depository Institutions Act was developed to

Accepted Answer

A) speed up the pace of deregulation. 
B) prevent depository institutions from offering money market deposit accounts and Super NOW accounts. 
C) prevent depository institutions from competing with money market mutual funds. 
D) All of the above are correct. 
A) speed up the pace of deregulation. 
B) prevent depository institutions from offering money market deposit accounts and Super NOW accounts. 
C) prevent depository institutions from competing with money market mutual funds. 
D) All of the above are correct.

Question 2

Prior to 1989, the S&L industry was regulated by which of the following?

Accepted Answer

A) the Office of Thrift Supervision (OTS) 
B) the Fed 
C) the FDIC 
D) the Federal Home Loan Bank Board 
A) the Office of Thrift Supervision (OTS) 
B) the Fed 
C) the FDIC 
D) the Federal Home Loan Bank Board

Question 3

Insured S&Ls are regulated in some way by which of the following?

Accepted Answer

A) the Office of Thrift Supervision (OTS). 
B) the Fed. 
C) the FDIC. 
D) All of the above are correct. 
A) the Office of Thrift Supervision (OTS). 
B) the Fed. 
C) the FDIC. 
D) All of the above are correct.

Question 4

Which act set uniform and universal reserve requirements?

Accepted Answer

A) Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  
B) the Community Reinvestment Act 
C) The Garn-St. Germain Act 
D) Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  
A) Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  
B) the Community Reinvestment Act 
C) The Garn-St. Germain Act 
D) Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)

Question 5

Which act authorized financial holding companies?

Accepted Answer

A) Gramm-Leach-Bliley Act of 1999 
B) The Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  of 1989 
C) The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991 
D) The Interstate Banking and Branching Efficiency Act (IBBE
A)  of 1994 
A) Gramm-Leach-Bliley Act of 1999 
B) The Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  of 1989 
C) The Federal Deposit Insurance Corporation Improvement Act (FDICI
A)  of 1991 
D) The Interstate Banking and Branching Efficiency Act (IBBE
A)  of 1994

Question 6

Provisions of the Gramm-Leach-Bliley Act (GLBA) include all of the following except:

Accepted Answer

A) authorized financial holding companies that could engage in a broad array of financial and nonfinancial activities 
B) authorized banks to underwrite and market municipal revenue bonds 
C) authorized banks to own or control financial subsidiaries that engage in activities that national banks are not permitted to engage in; prior approval must received by the Office of the Controller of the Currency 
D) repeal of the "too-big-to-fail" doctrine 
A) authorized financial holding companies that could engage in a broad array of financial and nonfinancial activities 
B) authorized banks to underwrite and market municipal revenue bonds 
C) authorized banks to own or control financial subsidiaries that engage in activities that national banks are not permitted to engage in; prior approval must received by the Office of the Controller of the Currency 
D) repeal of the "too-big-to-fail" doctrine

Question 7

The Emergency Economic Stabilization Act of 2008 did all of the following except

Accepted Answer

A) provide tax payers with the largest tax decrease in history to stabilize the economy. 
B) create the Troubled Asset Relief Program (TARP). 
C) temporarily increased deposit insurance to $250,000 on all accounts. 
D) originally authorized the purchase of up to $700 billion of "toxic" assets. 
A) provide tax payers with the largest tax decrease in history to stabilize the economy. 
B) create the Troubled Asset Relief Program (TARP). 
C) temporarily increased deposit insurance to $250,000 on all accounts. 
D) originally authorized the purchase of up to $700 billion of "toxic" assets.

Question 8

Credit crunches occur when

Accepted Answer

A) the quantity supplied of credit is greater than the quantity demanded at the prevailing interest rate. 
B) the quantity demanded of credit is greater than the quantity supplied at the prevailing interest rate. 
C) the quantity supplied of credit is greater than the quantity demanded at all interest rates. 
D) the supply of a particular type of credit is greater than demand. 
A) the quantity supplied of credit is greater than the quantity demanded at the prevailing interest rate. 
B) the quantity demanded of credit is greater than the quantity supplied at the prevailing interest rate. 
C) the quantity supplied of credit is greater than the quantity demanded at all interest rates. 
D) the supply of a particular type of credit is greater than demand.

Question 9

______________________merged the deposit insurance funds.

Accepted Answer

A) The Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  
B) The Federal Deposit Insurance Reform Act of 2005 
C) The Basel Accord 
D) The Federal Deposit Insurance Corporation Improvement Act of 1991 
A) The Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  
B) The Federal Deposit Insurance Reform Act of 2005 
C) The Basel Accord 
D) The Federal Deposit Insurance Corporation Improvement Act of 1991

Question 10

Before the 1980s, regulations encouraged which of the following?

Accepted Answer

A) bank runs 
B) high returns on assets 
C) bank insolvencies 
D) specialization 
A) bank runs 
B) high returns on assets 
C) bank insolvencies 
D) specialization

Question 11

Which of the following financial intermediaries had larger reserves and fewer losses during the 1980s compared to other financial intermediaries?

Accepted Answer

A) credit unions 
B) savings and loans 
C) banks 
D) car dealers 
A) credit unions 
B) savings and loans 
C) banks 
D) car dealers

Question 12

The __________, passed in 1988, is an agreement among twelve countries to set international capital standards for banks.

Accepted Answer

A) Basel Accord 
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) Basel Accord 
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 13

Financial options are regulated by which government agency?

Accepted Answer

A) the Commodity Futures Trading Commission 
B) the Securities and Exchange Commission 
C) the Federal Trade Commission 
D) the Options Clearing Corporation 
A) the Commodity Futures Trading Commission 
B) the Securities and Exchange Commission 
C) the Federal Trade Commission 
D) the Options Clearing Corporation

Question 14

Which of the following is false?

Accepted Answer

A) The Emergency Economic Stabilization (EES
A)  of 2008 was passed in response to the financial crisis of 2007-2008. 
B) The Emergency Economic Stabilization of 2008 authorized the U.S. Treasury to purchase up to $700 billion of "toxic" assets that were clogging the financial system. 
C) The Emergency Economic Stabilization of 2008 authorized $700 billion to be used to bail out homeowners whose homes were in foreclosure. 
D) Shortly after its passage, the TARP program authorized by the EESA was revised and the initial funds were used to purchase preferred stock in troubled banks rather than to purchase "toxic" assets. 
A) The Emergency Economic Stabilization (EES
A)  of 2008 was passed in response to the financial crisis of 2007-2008. 
B) The Emergency Economic Stabilization of 2008 authorized the U.S. Treasury to purchase up to $700 billion of "toxic" assets that were clogging the financial system. 
C) The Emergency Economic Stabilization of 2008 authorized $700 billion to be used to bail out homeowners whose homes were in foreclosure. 
D) Shortly after its passage, the TARP program authorized by the EESA was revised and the initial funds were used to purchase preferred stock in troubled banks rather than to purchase "toxic" assets.

Question 15

The Federal Deposit Insurance Corporation Improvement Act (FDICIA) was passed in an attempt to

Accepted Answer

A) oversee the S&L industry. 
B) regulate insurance companies. 
C) secure the safety and soundness of the banking and thrift industries. 
D) provide unlimited insurance coverage on retirement accounts. 
A) oversee the S&L industry. 
B) regulate insurance companies. 
C) secure the safety and soundness of the banking and thrift industries. 
D) provide unlimited insurance coverage on retirement accounts.

Question 16

Which of the following statements regarding bank regulation is true?

Accepted Answer

A) The Basel Accord specifies the amount of reserves banks must hold relative to their deposits. 
B) The 1989 Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  was passed in response to the 1987 stock market crash and was an attempt at deregulation following the crises of the early 1980s. 
C) The Community Reinvestment Act has been weakened by the recent increase in bank mergers. 
D) As a result of the Basel Accord, Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A) , and the Federal Deposit Insurance Corporation Improvement Act (FDICI
A) , banks and other depositories are now subject to both risk-based capital standards and risk-based insurance premiums. 
A) The Basel Accord specifies the amount of reserves banks must hold relative to their deposits. 
B) The 1989 Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A)  was passed in response to the 1987 stock market crash and was an attempt at deregulation following the crises of the early 1980s. 
C) The Community Reinvestment Act has been weakened by the recent increase in bank mergers. 
D) As a result of the Basel Accord, Financial Institutions Reform, Recovery, and Enforcement Act (FIRRE
A) , and the Federal Deposit Insurance Corporation Improvement Act (FDICI
A) , banks and other depositories are now subject to both risk-based capital standards and risk-based insurance premiums.

Question 17

Why have depository institutions been regulated?

Accepted Answer

A) because the failure of a depository institution has system-wide repercussions 
B) because all industries in the economy are highly regulated 
C) because in the past, depository institutions have made outlandish profits 
D) All of the above are correct. 
A) because the failure of a depository institution has system-wide repercussions 
B) because all industries in the economy are highly regulated 
C) because in the past, depository institutions have made outlandish profits 
D) All of the above are correct.

Question 18

Which of the following insures deposits in credit unions?

Accepted Answer

A) U.S. Treasury 
B) the Fed 
C) FDIC 
D) National Credit Union Share Insurance Fund 
A) U.S. Treasury 
B) the Fed 
C) FDIC 
D) National Credit Union Share Insurance Fund

Question 19

Security firms are regulated by which of the following?

Accepted Answer

A) the Securities and Exchange Commission (SE
C)  
B) the Fed 
C) the National Association of Securities Dealers 
D) the Department of the Treasury 
A) the Securities and Exchange Commission (SE
C)  
B) the Fed 
C) the National Association of Securities Dealers 
D) the Department of the Treasury

Question 20

The Garn-St. Germain Depository Institutions Act was passed in order to

Accepted Answer

A) authorize interest earning checking accounts. 
B) prevent depository institutions from offering interest earning checking accounts. 
C) help depository institutions compete with money market mutual funds by being able to authorize money market deposit accounts. 
D) phase out Regulation Q interest rate ceilings. 
A) authorize interest earning checking accounts. 
B) prevent depository institutions from offering interest earning checking accounts. 
C) help depository institutions compete with money market mutual funds by being able to authorize money market deposit accounts. 
D) phase out Regulation Q interest rate ceilings.

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

The Garn-St. Germain Depository Institutions Act was developed to

Prior to 1989, the S&L industry was regulated by which of the following?

Insured S&Ls are regulated in some way by which of the following?

Which act set uniform and universal reserve requirements?

Which act authorized financial holding companies?

Provisions of the Gramm-Leach-Bliley Act (GLBA) include all of the following except:

The Emergency Economic Stabilization Act of 2008 did all of the following except

Credit crunches occur when

______________________merged the deposit insurance funds.

Before the 1980s, regulations encouraged which of the following?

Which of the following financial intermediaries had larger reserves and fewer losses during the 1980s compared to other financial intermediaries?

The __________, passed in 1988, is an agreement among twelve countries to set international capital standards for banks.

Financial options are regulated by which government agency?

Which of the following is false?

The Federal Deposit Insurance Corporation Improvement Act (FDICIA) was passed in an attempt to

Which of the following statements regarding bank regulation is true?

Why have depository institutions been regulated?

Which of the following insures deposits in credit unions?

Security firms are regulated by which of the following?

The Garn-St. Germain Depository Institutions Act was passed in order 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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