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Exam #1

Terms in this set (31)

Which act separated commercial banking, investment banking, and insurance into three separate industries:
Glass-Steagall Act
Which act limited the activities a company could engage in if it owned a bank:
Bank Holding Company Act
Which of the following mortgage types were offered to "subprime" borrowers:
Interest Only
Option Adjustable-Rate
The U.S. government took all of the following actions to address the credit crisis in 2008 except:
Created the Keep Banks Solvent (KBS) agency
In 2008, the U.S. Treasury supported financial institutions by:
Purchasing troubled assets

Buying preferred stock in some financial institutions

Issuing guarantees on money market funds

Increasing the deposit insurance limit

All of the above*
__________ have a large international presence:
Global banks
An "independent" bank is:
Not controlled by a multi-bank holding company or any other outside interest
A __________ controls at least two commercial banks:
Multibank holding company
The _________ gave regulatory responsibility over financial holding companies to the Federal Reserve:
Gramm-Leach-Bliley Act
S-corps must have no more than ___ shareholders:
100
Deposits at Credit Unions are insured by the:
National Credit Union Association
Mortgage defaults were greatest in geographic markets that had experienced the greatest run-up in real estate prices:
True
Smaller banks tended to have more subprime mortgage defaults than larger banks:
False
The primary appeal of online banking is:
Its convenience
Savings and loans have historically specialized in:
Real estate loans
Bank regulations can guarantee that banker managers will make sound management decisions:
False
Just a guideline
The primary focus of regulations:
Protect the depositors
Acronym for CAMELS rating:
Capital adequacy
Asset quality
Management quality
Earnings
Liquidity
Sensitivity to market risk
Which of the following is not represented in the CAMELS ratings:
Cash adequacy
When we talk about bank regulations we say:
Serve as guidelines
How many branches does the federal reserve have:
12
The FDIC ensures Credit Union accounts up to $250,000:
False
Deposit insurance was increased to__________during 2008:
$250,000
Which of the following led to the sharp decline in bank profits in 2008:
Record high loan loss provisions
Significant goodwill or impairment expenses
Banks generate their largest form of income from:
Loans
Bank assets fall into each of the following categories except:
Demand deposits
How do banks make money?
Interest income
Non-interest income
investment income
Who regulates banks and credit unions?
FDIC (Banks)
NUCA (Credit Unions)
What is the primary reason for 2008 Recession?
Collapse of the housing market from subprime mortgages caused by greed
Difference between relationship and transactional banking?
Relationship - focuses on building connections with the customers and making them feel valued

Transactional - focuses more on the transactions
Bank charters are issued by
OCC (National)
State (State)
OTS (Federal)
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