chapter 2 test

The law that set up the federal banking system and provided for the chartering of national banks was the

National Bank Act.

The European Central Bank has the main goal of:

ensuring price stability.

Banks are regulated for which of the reasons listed below

-Banks are leading repositories of the public's savings.-Banks have the power to create money.-Banks provide businesses and individuals with loans that support consumption and investment spending.-Banks assist governments in conducting economic policy, collecting taxes, and dispensing government payments.

The Emergency Economic Stabilization Act passed in 2008 during the global credit crisis, allowed for:

All of the options are correct.

The Financial Services Regulatory Relief Act of 2006:

All of the options are correct.

Of the principal reasons for regulating banks, what was the primary purpose of the National Banking Act (1863)

Chartering new banks and examining existing ones

Of the principal reasons for regulating banks, what was the primary purpose of the Federal Reserve Act of 1913

Control of the money supply

Of the principal reasons for regulating banks, what was the primary purpose of the Consumer Credit Protection Act

Ensure that customers are aware of their rights and responsibilities under a loan agreement

The equivalent of the Federal Reserve System in Europe is known as the:

European Central Bank.

The federal agency that regulates the most banks is the:

Federal Deposit Insurance Corporation.

The oldest federal bank agency is the:

Office of the Comptroller of the Currency.

Which of the following has become the principal tool of central bank monetary policy today

Open market operations

The _________ allows adequately capitalized bank holding companies to acquire banks in any state.

Riegle-Neal Interstate Banking and Branching Efficiency Act

_____ requires corporations controlling two or more banks to register with the Federal Reserve Board and seek approval for any new business acquisitions.

The Bank Holding Company Act

Which federal banking act forces more individuals to repay at least part of what they owe and will push higher-income borrowers into more costly forms of bankruptcy

The Bankruptcy Abuse Prevention and Consumer Protection Act

Which federal banking act reduces the need for banks to transport paper checks across the country

The Check 21 Act

Which of the following acts created a Financial Stability Oversight Council to dampen systemic risk

The Dodd-Frank Regulatory Reform Act

_____ allows European and foreign banks greater freedom to cross national borders.

The European Monetary Union

Which of the following created the Truth in Savings Act

The FDIC Improvement Act

Which federal banking act requires the Federal Trade Commission to make it easier for victims of identity theft to file theft reports and requires credit bureaus to help victims resolve the problem

The Fair and Accurate Credit Transactions Act

Which federal banking act extends deposit insurance coverage on qualified retirement accounts from $100,000 to $250,000 and authorizes the FDIC to periodically increase deposit insurance coverage to keep up with inflation

The Federal Deposit Insurance Reform Act

Which federal banking act prohibits publishing false or misleading information about the financial performance of a public company and requires top corporate officers to vouch for the accuracy of their company's financial statements

The Sarbanes-Oxley Act

As per the Gramm-Leach-Bliley Act, one of the ways through which a banking-insurance-securities affiliation can take place is through:

a financial holding company.

There is an important debate raging today regarding whether banks should be regulated at all. George Benston contends that:

depository institutions should be regulated no differently than any other corporation with no subsidies or special privileges.

An institutional arrangement in which federal and state authorities both have significant bank regulatory powers is referred to as:

dual banking system.

One of the earliest theories regarding the impact of regulation on banks was developed by George Stigler. He contends that:

firms in regulated industries actually seek out regulations because they bring monopolistic rents.

The Gramm-Leach-Bliley Act (Financial Services Modernization Act) calls for linking the government supervision of the financial-services firm to the types of activities that the firm undertakes. For example, the insurance portion of the firm would be regulated by state insurance commissions and the banking portion of the firm would be regulated by banking regulators. This approach to government supervision of financial services is known as:

functional regulation.

The fastest growing financial crime in the U.S. is:

identity theft.

The Federal Reserve buys Treasury Bills in the open market. This will tend to:

increase the available for use funds with banks and dealers involved in the transaction.

The Federal Reserve policy tool under which the Fed attempts to bring psychological pressure to bear on individuals and institutions to conform to the Fed's policies using letters, phone calls, and speeches is known as:

moral suasion.

As per the National Currency and Bank Acts, the comptroller of currency ensures that every national bank is examined by a team of federal examiners at least:

once every 12 to 18 months.

Samuel Peltzman had a different view to George Stigler on the impact of regulation on banks. He contends that:

regulations shelter firms from changes in demand and cost, lowering its risk.

Common minimum capital requirements on banks in leading industrialized nations that are based on the riskiness of their assets is imposed by:

the Basel Agreement.

The 1977 act that prevents banks from "redlining" certain neighborhoods, refusing to serve those areas is:

the Community Reinvestment Act.

The law which lifted government deposit interest ceilings in favor of competitive interest rates is:

the Depository Institutions Deregulation and Monetary Control Act.

The act that allowed bank holding companies to acquire nonbank depository institutions and convert them to branches is:

the Financial Institutions Reform, Recovery and Enforcement Act.

The law that made bank and nonbank depository institutions more alike in the services they could offer and allowed banks and thrifts to more fully compete with other financial institutions is:

the Garn-St Germain Depository Institutions Act.

The federal law that prohibited federally supervised commercial banks from offering investment banking services on privately issued securities is known as:

the Glass-Steagall Act.

The law that allows banks to affiliate with insurance companies and securities firms to form financial services conglomerates is:

the Gramm-Leach-Bliley Act (Financial Services Modernization Act).

The 1994 law that allowed bank holding companies to acquire banks anywhere in the U.S. is:

the Riegle-Neal Interstate Banking and Branching Efficiency Act.

Which federal banking act requires that financial service providers establish the identity of customers opening new accounts

the USA Patriot Act

The act which requires financial institutions to share information about customer identities with government agencies is:

the USA Patriot Act.