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1 | |
The law passed by the U.S. Congress in 1983 which required American banks to post special reserves to cover possible losses on their foreign loans is known as: |
| | A) | The Foreign Loan Risk Act. |
| | B) | The Basle Agreement. |
| | C) | The Foreign Capital Reserves Act. |
| | D) | The International Lending and Supervision Act. |
| | E) | None of the above. |
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2 | |
U.S. multinational banks are permitted to: |
| | A) | underwrite most domestic corporate securities. |
| | B) | underwrite Eurobonds and Euronotes abroad. |
| | C) | buy and sell corporate stock listed on the New York Stock Exchange. |
| | D) | underwrite over-the-counter bonds. |
| | E) | U.S. banks are prohibited from any kind of securities transactions. |
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3 | |
International banks are offering more international services from their domestic offices for all of the following reasons except: |
| | A) | Political instability has made foreign lending less attractive. |
| | B) | A large network of foreign branches is expensive to maintain. |
| | C) | Improvements in communications technology have made it less necessary to have a branch or office in every country. |
| | D) | Government controls over banks have relaxed. |
| | E) | Banks are permitted to engage in a wider array of services than in the past. |
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4 | |
The federal law which provides for federal licensing of branches and agencies of foreign banks operating in the U.S. is the: |
| | A) | International Banking Act of 1978. |
| | B) | Depository Institutions Deregulation Act of 1980. |
| | C) | Garn-St Germain Depository Institutions Act of 1982. |
| | D) | Monetary Control Act of 1980. |
| | E) | none of the above. |
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5 | |
One of the facilities used by major U.S. banks to expand abroad is the ____, which is really a booking office located principally in the Caribbean area and designed to attract Eurocurrency deposits. |
| | A) | international banking department |
| | B) | shell branch |
| | C) | representative office |
| | D) | Edge Act corporation |
| | E) | none of the above |
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6 | |
The first foreign banks to enter the U.S. were from: |
| | A) | Canada. |
| | B) | Great Britain. |
| | C) | France. |
| | D) | The Netherlands. |
| | E) | none of the above. |
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7 | |
When international investors face the possibility of loss when the country or countries in which they have invested prohibit outflows of capital or the repatriation of dividends or interest payments back to their home country, this is known as: |
| | A) | transfer risk. |
| | B) | currency risk. |
| | C) | trading risk. |
| | D) | investment risk. |
| | E) | none of the above. |
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8 | |
The rate of interest charged borrowers from most Eurocurrency loans is tied to the prevailing level of the: |
| | A) | effective federal funds interest rate. |
| | B) | LIBOR. |
| | C) | prime bank rate. |
| | D) | Bank of England discount rate. |
| | E) | none of the above. |
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9 | |
In terms of total assets held, the country or area of the globe where the foreign branches of U.S. banks hold the most assets is: |
| | A) | Japan. |
| | B) | United Kingdom. |
| | C) | Middle East. |
| | D) | Switzerland. |
| | E) | West Germany. |
| | F) | none of the above. |
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10 | |
The danger of loss associated with changing relative prices of foreign and domestic currencies is known as: |
| | A) | transfer risk. |
| | B) | currency risk. |
| | C) | political risk. |
| | D) | trading risk. |
| | E) | none of the above. |
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11 | |
A group of banks put together in order to subscribe to a Eurobond issue is called a: |
| | A) | consortium. |
| | B) | security partner (SPA). |
| | C) | cooperative trust. |
| | D) | best-efforts sales agreement. |
| | E) | none of the above. |
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12 | |
The compact signed by the United States, Japan, Canada, and leading industrialized countries in Western Europe to monitor the capital positions of their banks and to impose minimum capital-to-risk-adjusted-asset ratios on all banks in the signing countries is known as the: |
| | A) | International Lending and Supervision Agreement. |
| | B) | Cooperative Capital Regulation Treaty. |
| | C) | Joint Interim Capital Agreement. |
| | D) | Basle Agreement. |
| | E) | None of the above. |
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13 | |
Services offered by international banks include all of the following except: |
| | A) | issuing letters of credit. |
| | B) | buying and selling foreign exchange. |
| | C) | issuing bankers' acceptances. |
| | D) | accepting Eurocurrency deposits. |
| | E) | assisting in the marketing of Eurocurrency bonds. |
| | F) | advising on foreign market conditions. |
| | G) | all of the above are services offered by international banks. |
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14 | |
Under regulations established by the Federal Reserve Board in 1981 IBFs must: |
| | A) | be located in the United States. |
| | B) | carry reserve requirements on their deposits. |
| | C) | carry deposit insurance. |
| | D) | a, b, and c are all requirements to establish an IBF. |
| | E) | none of the above are required. |
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15 | |
In the international financial markets in recent years, mergers have taken place between: |
| | A) | banks |
| | B) | banks and insurance companies |
| | C) | banks and security firms |
| | D) | a and c only |
| | E) | a, b, and c |
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16 | |
Deposits in an International Banking Facility differ from domestic deposits in that |
| | A) | The IBF is always owned by a foreign bank. |
| | B) | The IBF is always owned by a domestic bank. |
| | C) | Deposits in the IBF are not subject to U.S. reserve requirements. |
| | D) | There is no difference. Both types of deposits are insured by the FDIC. |
| | E) | Deposits in the IBF cannot be withdrawn on demand. |
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17 | |
Special subsidiaries of U.S. banks authorized to offer international banking services are known as: |
| | A) | shell branches. |
| | B) | credit agencies. |
| | C) | representative offices. |
| | D) | Edge Act and Agreement corporations. |
| | E) | IBFs. |
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18 | |
The instrument that is a bank's promise to pay for goods stored overseas is called a: |
| | A) | letter of credit. |
| | B) | bankers' acceptance. |
| | C) | Eurocurrency loan. |
| | D) | Eurobond. |
| | E) | note issuance facility. |
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19 | |
The organizational vehicle used by a multinational bank to offer international services that is really a set of computerized accounts is the: |
| | A) | representative office. |
| | B) | international banking facility. |
| | C) | shell branch. |
| | D) | Edge Act. |
| | E) | none of the above. |
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20 | |
While it cannot accept deposits, this type of international banking facility set up abroad by a U.S. bank attempts to find new loan customers for the home office and assist existing customers with their particular financial needs. The particular facility being described is the: |
| | A) | international banking department. |
| | B) | shell branch. |
| | C) | representative office. |
| | D) | agreement corporation. |
| | E) | Edge Act corporation. |
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