Matching
Match each of the following potential conflicts of interest with their corresponding definition or description.
Premises:
To avoid being exposed to potential losses in a securities offering, a bank may place the securities in the accounts of customers in the trust department or other areas over which it has discretionary investment powers.
When a bank suggests the issuance of capital market debt for the purpose of reducing bank loans under conditions of deteriorating or questionable firm financial health.
The approval of cheap loans to an investor under the implicit condition that the loan proceeds are to be used to purchase securities underwritten by a securities affiliate.
The use of inside information about customers or rivals that can be useful in setting securities prices or distributing securities offerings.
Using lending power to coerce a customer to purchase or use the products sold by an affiliate.
When banks have the power to sell nonbank products, employees may no longer give dispassionate, or unbiased, advice to customers.
Responses:
Third-party loans
Information transfer
Stuffing fiduciary accounts
Bankruptcy risk transference
Tie-ins
Salesperson's stake
Correct Answer:
Premises:
Responses:
To avoid being exposed to potential losses in a securities offering, a bank may place the securities in the accounts of customers in the trust department or other areas over which it has discretionary investment powers.
When a bank suggests the issuance of capital market debt for the purpose of reducing bank loans under conditions of deteriorating or questionable firm financial health.
The approval of cheap loans to an investor under the implicit condition that the loan proceeds are to be used to purchase securities underwritten by a securities affiliate.
The use of inside information about customers or rivals that can be useful in setting securities prices or distributing securities offerings.
Using lending power to coerce a customer to purchase or use the products sold by an affiliate.
When banks have the power to sell nonbank products, employees may no longer give dispassionate, or unbiased, advice to customers.
Premises:
To avoid being exposed to potential losses in a securities offering, a bank may place the securities in the accounts of customers in the trust department or other areas over which it has discretionary investment powers.
When a bank suggests the issuance of capital market debt for the purpose of reducing bank loans under conditions of deteriorating or questionable firm financial health.
The approval of cheap loans to an investor under the implicit condition that the loan proceeds are to be used to purchase securities underwritten by a securities affiliate.
The use of inside information about customers or rivals that can be useful in setting securities prices or distributing securities offerings.
Using lending power to coerce a customer to purchase or use the products sold by an affiliate.
When banks have the power to sell nonbank products, employees may no longer give dispassionate, or unbiased, advice to customers.
Responses:
Related Questions
Q22: Interstate banking barriers have deteriorated in part
Q48: What are the ways in which an
Q49: The USA Patriot Act of 2001<br>A)requires U.S.banks
Q51: Historically, regulations have encouraged the expansion of
Q55: If Bank A acquires Bank C, what
Q59: Which of the following is NOT an
Q69: By the early 1990s interstate banking pacts
Q87: Identify the procompetitive effect of banks' expansion
Q105: Concern about the cost of managing a
Q115: In the U.S., the Glass-Steagall Act limited