Question 1

The __________, passed in 1977, attempts to increase the availability of credit to economically disadvantaged areas and to correct alleged discriminatory lending practices.

Accepted Answer

A)  Community Reinvestment Act
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)  E) C) and D)
F) B) and D)

Question 2

Which of the following did the Basel Accord not do?

Accepted Answer

A)  Mandated requirements for core capital and total capital based upon risk-adjusted assets and total assets
B)  Defined core capital as total capital plus supplemental capital (loan loss reserves plus subordinated debt) 
C)  Defined core capital as the historical value of outstanding stock plus retained earnings
D)  Defined risk-adjusted assets by assigning different weights to different types of assets, depending on their riskE) A) and B)
F) B) and C)

Question 3

Which of the following is considered a monetary control measure covered by the Depository Institutions Deregulation and Monetary Control Act (DIDMCA) ?

Accepted Answer

A)  the phasing out of Regulation Q
B)  uniform reserve requirements
C)  suspension of state maximum interest rates on loans
D)  All of the above are correct.E) None of the above
F) C) and D)

Question 4

The original purpose of the Community Reinvestment Act was to

Accepted Answer

A)  increase the availability of credit to economically disadvantaged areas.
B)  provide low interest loans to small business.
C)  correct alleged discriminatory lending practices.
D)  Both a and c are correct.E) None of the above
F) B) and D)

Question 5

Which of the following acts merged the Savings Association Insurance Fund (SAIF)  and the Bank Insurance Fund (BIF) ?

Accepted Answer

A)  the Glass-Steagall Act
B)  the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMC
A)  
C)  the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICI
A)  
D)  the Federal Deposit Insurance Reform Act of 2005E) All of the above
F) None of the above

Question 6

Limits placed on the interest rate that may be charged for a loan are called

Accepted Answer

A)   usury ceilings.
B)   Regulation
C)   Regulation Q.
D)   universal interest rate requirements.E) B) and C)
F) A) and D)

Question 7

Which of the following provides insurance for pension fund benefits?

Accepted Answer

A)  the Department of Labor
B)  the Department of the Treasury
C)  the Pension Benefit Guaranty Corporation
D)  the FDICE) B) and C)
F) All of the above C

Question 8

Which of the following is false?

Accepted Answer

A)  Regulation must balance the goals of competition and efficiency versus safety and soundness.
B)  Historically, regulation encouraged market segmentation.
C)  The regulatory structure is in the process of ongoing change.
D)  Investment and commercial banking are still separated.E) B) and D)
F) A) and B)

Question 9

Which of the following changes result in concerns about the adequacy of banking regulation?

Accepted Answer

A)  new products and markets
B)  technological change in the delivery of financial services
C)  globalization
D)  All of the above are correct.E) B) and C)
F) A) and C)

Question 10

The Resolution Trust Corporation (RTC)  was created to

Accepted Answer

A)  provide deposit insurance for thrift intermediaries.
B)  provide deposit insurance for S&Ls.
C)  regulate credit unions.
D)  dispose of the properties of the failed S&Ls.E) B) and C)
F) A) and C)

Question 11

__________ greatly expanded the lending powers of S&Ls and created money market deposit accounts.

Accepted Answer

A)  Depository Institutions Deregulation and Monetary Control Act (DIDMC
A)  
B)  SAIF
C)  The Garn-St. Germain Act
D)  FDICE) A) and B)
F) A) and C)

Question 12

Which of the following is the agency that was in charge of the Resolution Trust Corporation (RTC) ?

Accepted Answer

A)  the Fed
B)  the Office of Thrift Supervision (OTS) 
C)  the FDIC
D)  the FSLICE) B) and D)
F) A) and D) C

Question 13

Which of the following is a current regulator of banks?

Accepted Answer

A)  the Fed
B)  the Securities and Exchange Commission
C)  the Office of Thrift Supervision
D)  the Resolution Trust CorporationE) All of the above
F) C) and D)

Question 14

A financial holding company is a bank holding company that may engage in an even more extensive array of financial and nonfinancial activities than __________.

Accepted Answer

A)  nonbanks
B)  traditional bank holding companies
C)  Federal Reserve banks
D)  Both a and c are correct.E) B) and C)
F) None of the above

Question 15

A/An _________________________ is a bank holding company that may engage in an even more extensive array of financial and nonfinancial activities than traditional bank holding companies.

Accepted Answer

A)  financial holding company
B)  interstate bank
C)  financial intermediary
D)  super bankE) B) and C)
F) B) and D)

Question 16

The Federal Deposit Insurance Corporation Improvement Act (FDICIA)  limited insurance coverage in regular accounts to a maximum of __________ per account until 2010.

Accepted Answer

A)  $50,000
B)  $100,000
C)  $200,000
D)  $1,000,000E) A) and C)
F) A) and B)

Question 17

Which of the following statements about the Community Reinvestment Act of 1977 is false?

Accepted Answer

A)  The Community Reinvestment Act is enforced through the denial of bank mergers.
B)  The act encourages banks to discover community needs, create services needed by the community, participate in government-insured lending programs, train employees to be responsive to requirements of the Community Reinvestment Act, and market services directly to low- and moderate-income groups.
C)  The Community Reinvestment Act provides benefits to minority and lower income communities but not to financial intermediaries.
D)  The purpose of the Community Reinvestment Act is to increase the availability of credit to economically disadvantaged areas.E) None of the above
F) A) and C)

Question 18

Which of the following is not considered a current regulator of the banking system?

Accepted Answer

A)  the Fed
B)  the Securities and Exchange Commission
C)  the Office of the Comptroller of the Currency
D)  the FDICE) B) and C)
F) A) and B) B

Question 19

Insurance companies are regulated by the

Accepted Answer

A)  Federal Trade Commission.
B)  FDIC.
C)  Securities and Exchange Commission (SE
C)  .
D)  insurance commissioner of the state in which they do business.E) A) and C)
F) A) and B)

Question 20

Which of the following was set up by the financial options industry for self-regulation?

Accepted Answer

A)  the Securities and Exchange Commission
B)  the Federal Trade Commission
C)  the National Options Association
D)  the Options Clearing CorporationE) A) and D)
F) C) and D)

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

The __________, passed in 1977, attempts to increase the availability of credit to economically disadvantaged areas and to correct alleged discriminatory lending practices.

Correct AnswerverifiedShow Answer

Which of the following did the Basel Accord not do?

Correct AnswerverifiedShow Answer

Which of the following is considered a monetary control measure covered by the Depository Institutions Deregulation and Monetary Control Act (DIDMCA) ?

Correct AnswerverifiedShow Answer

The original purpose of the Community Reinvestment Act was to

Correct AnswerverifiedShow Answer

Which of the following acts merged the Savings Association Insurance Fund (SAIF) and the Bank Insurance Fund (BIF) ?

Correct AnswerverifiedShow Answer

Limits placed on the interest rate that may be charged for a loan are called

Correct AnswerverifiedShow Answer

Which of the following provides insurance for pension fund benefits?

Correct AnswerverifiedC

Which of the following is false?

Correct AnswerverifiedShow Answer

Which of the following changes result in concerns about the adequacy of banking regulation?

Correct AnswerverifiedShow Answer

The Resolution Trust Corporation (RTC) was created to

Correct AnswerverifiedShow Answer

__________ greatly expanded the lending powers of S&Ls and created money market deposit accounts.

Correct AnswerverifiedShow Answer

Which of the following is the agency that was in charge of the Resolution Trust Corporation (RTC) ?

Correct AnswerverifiedC

Which of the following is a current regulator of banks?

Correct AnswerverifiedShow Answer

A financial holding company is a bank holding company that may engage in an even more extensive array of financial and nonfinancial activities than __________.

Correct AnswerverifiedShow Answer

A/An _________________________ is a bank holding company that may engage in an even more extensive array of financial and nonfinancial activities than traditional bank holding companies.

Correct AnswerverifiedShow Answer

The Federal Deposit Insurance Corporation Improvement Act (FDICIA) limited insurance coverage in regular accounts to a maximum of __________ per account until 2010.

Correct AnswerverifiedShow Answer

Which of the following statements about the Community Reinvestment Act of 1977 is false?

Correct AnswerverifiedShow Answer

Which of the following is not considered a current regulator of the banking system?

Correct AnswerverifiedB

Insurance companies are regulated by the

Correct AnswerverifiedShow Answer

Which of the following was set up by the financial options industry for self-regulation?

Correct AnswerverifiedShow Answer

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C

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C

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B

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