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| 1 | |
A newly established banking office is called a/an: |
| | A) | outside office |
| | B) | unit banking office |
| | C) | subsidiary office |
| | D) | Section 20 affiliate |
| | E) | de novo office |
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| 2 | |
In 1975, Congress passed __________________, which is aimed to combat discrimination by lending institutions. Furthermore, institutions are examined for compliance, and are required to publicly disclose their ratings under this act. |
| | A) | the Glass Steagall Act |
| | B) | the Bank Holding Company Act |
| | C) | the Community Reinvestment Act |
| | D) | the FDIC Improvement Act |
| | E) | FIRREA |
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| 3 | |
A philosophy known as ______________ was codified with passage of the 1978 International Banking Act. This act aimed to level the playing field for domestic and foreign banks in the U.S. |
| | A) | moral hazard |
| | B) | national treatment |
| | C) | universal banking |
| | D) | grandfathered treatment |
| | E) | Basle banking |
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| 4 | |
In 1988, U.S. member countries of the Bank for International Settlements reached agreement on the use of two, new risk-based capital ratios for bank regulation. This agreement was called: |
| | A) | the Tier II agreement |
| | B) | the Basel accord |
| | C) | Glass-Steagall |
| | D) | NAFTA |
| | E) | the Treasury Accord |
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| 5 | |
______________ is the result of summing up the book value of the bank's common equity, perpetual preferred stock, minority equity interests held by the bank—and then deducting goodwill. |
| | A) | Tier I capital |
| | B) | Reserves |
| | C) | Risk-adjusted assets |
| | D) | Total risk-based capital |
| | E) | Subordinated capital |
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| 6 | |
Refer to the following data for a particular commercial bank:
| Tier I Capital | $7.6 billion | | Total Risk-based Capital | $ 8.6 billion | | Total Assets | $84 billion | | Earning Assets | $75 billion | | Total Risk-Adjusted Assets | $71 billion |
Compute the bank's basic "capital to assets" ratio (not risk adjusted). |
| | A) | .090 |
| | B) | .100 |
| | C) | .098 |
| | D) | .107 |
| | E) | .115 |
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| 7 | |
Refer to the following data for a particular commercial bank:
| Tier I Capital | $7.6 billion | | Total Risk-based Capital | $ 8.6 billion | | Total Assets | $84 billion | | Earning Assets | $75 billion | | Total Risk-Adjusted Assets | $71 billion |
Compute the bank's Tier I risk-based capital ratio. |
| | A) | .090 |
| | B) | .100 |
| | C) | .098 |
| | D) | .107 |
| | E) | .115 |
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| 8 | |
Refer to the following data for a particular commercial bank:
| Tier I Capital | $7.6 billion | | Total Risk-based Capital | $ 8.6 billion | | Total Assets | $84 billion | | Earning Assets | $75 billion | | Total Risk-Adjusted Assets | $71 billion |
Compute the bank's total risk-based capital ratio. |
| | A) | .090 |
| | B) | .121 |
| | C) | .100 |
| | D) | .098 |
| | E) | .107 |
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| 9 | |
Refer to the following data for a particular commercial bank:
| Tier I Capital | $7.6 billion | | Total Risk-based Capital | $ 8.6 billion | | Total Assets | $84 billion | | Earning Assets | $75 billion | | Total Risk-Adjusted Assets | $71 billion |
Compute the bank's supplementary capital. |
| | A) | $1 billion |
| | B) | $4 billion |
| | C) | $9 billion |
| | D) | $66.4 billion |
| | E) | $63.4 billion |
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| 10 | |
At one time in the U.S., banks were restricted to operate out of just one office. Such banks were called: |
| | A) | one bank holding companies |
| | B) | de novo offices |
| | C) | universal banks |
| | D) | unit banks |
| | E) | grandfathered banks |
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| 11 | |
In 1991, passage of the _____________________ enhanced the powers of Federal bank regulators over foreign banks in the U.S. |
| | A) | Financial Services Modernization Act |
| | B) | International Banking Act |
| | C) | FDIC Improvement Act |
| | D) | Riegle Neal Act |
| | E) | Foreign Bank Supervision Enhancement Act |
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| 12 | |
A new, revised international agreement on bank capital regulations in the major industrialized countries was reached in 2004. This agreement is referred to as: |
| | A) | FDICIA |
| | B) | Basel II |
| | C) | Tier II |
| | D) | IRB |
| | E) | NAFTA |
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| 13 | |
The bulk of the nation's money supply is created within the private banking system and is sometimes called: |
| | A) | inside money |
| | B) | net money |
| | C) | base money |
| | D) | outside money |
| | E) | reserve money |
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| 14 | |
In January of 1993, the FDIC introduced: |
| | A) | its first-ever regulation of bank capitalization |
| | B) | the Savings Association Insurance Fund |
| | C) | the Bank Insurance Fund |
| | D) | a risk-based deposit insurance program |
| | E) | (c) and (d) |
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| 15 | |
___________________ insured the deposits of savings institutions from 1934 to 1989. |
| | A) | The FDIC |
| | B) | The Federal Reserve System |
| | C) | The Federal Home Loan Banks |
| | D) | FIRREA |
| | E) | FSLIC |
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| 16 | |
The Riegle-Neal Act was notable for: |
| | A) | introducing bank deposit insurance in the U.S. |
| | B) | bringing foreign banks operating in the U.S. under regulatory control. |
| | C) | opening the door to full interstate banking in the U.S. |
| | D) | starting a new insurance program for savings institutions. |
| | E) | initiating the chartering process for U.S. commercial banks. |
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| 17 | |
For a U.S. bank to be considered "well capitalized," one requirement is that its total risk based capital ratio be at least: |
| | A) | 2% |
| | B) | 4% |
| | C) | 6% |
| | D) | 8% |
| | E) | 10% |
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| 18 | |
The Glass Steagall Act sought to: |
| | A) | end deposit insurance for commercial banks. |
| | B) | bring bank holding companies under regulation of the Federal Reserve. |
| | C) | impose a rigid separation between commercial banking and investment banking. |
| | D) | deal with the crisis among savings & loan associations in the1980s. |
| | E) | allow insurance companies and securities firms to combine with commercial banks. |
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| 19 | |
In 1999, a significant piece of banking legislation was enacted in the U.S. This law allowed banking firms to combine with firms in the insurance and securities businesses. This law was the: |
| | A) | FDIC Improvement Act |
| | B) | Financial Services Modernization Act |
| | C) | FIRREA |
| | D) | Community Reinvestment Act |
| | E) | Bank Holding Company Act |
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