Finance 305 Exam 2 PT 2 ACTUAL PRACTICE EXAM
QUESTIONS AND CORRECT DETAILED ANSWERS (100%
CORRECT VERIFIED SOLUTIONS) A NEW UPDATED VERSION
|ALREADY GRADED A+ BEST DOCUMENT FOR EXAM PREP
Phase 1
In 1980, deregulation freed savings institutions from Regulation Q
and allowed them to raise deposit rates and engage in speculative
lending. Saving institutions suffered high default rates on
mortgages as a result
Phase 2
Chose to not close capital-depleted and insolvent savings
institutions, allowing them to operate (Regulatory Forbearance)
Federal Savings and Loan Insurance Companies (FSLIC)
Failed in the 1980s then depleted the FSLIC funds itself to such
extent that by 1989 it was insolvent
Financial Institutions Reform, Recovery, and Enforcement Act
(FIRREA) of 1989
Abolished the FSLIC and created a new savings association
insurance funds (SAIF) and put under the management of the
FDIC
,Depository Institutions
Financial institutions that are legally allowed to accept deposits
from customers (commercial banks and thrift institutions)
From 1984-2016, the number of commercial banks have
significantly decreased due to changes in size, structure and result of
M&A
Deregulation in Banks
M&A were due to series of financial deregulations
The McFadden Act of 1927
Effectively prohibited banks from branching across state lines
The Glass-Steagall Act of 1933
Separated commercial banking from securities industry
The Riegle Neal Act 1994
Easing branching by banks across state lines
, The Gramm-Leach-Bliley Act of 1999 (Financial Services Modernization
Act)
Full authority to enter the investment banking and insurance business
Banking Consolidation
The banking industry reduced the asset shares of community banks
dramatically
The structure of the banking industry
affects equally of opportunity and upward mobility in society
Equity Multiplier
Fell after the 2008 crisis, regulation of capital was made to not increase
back to how it was before
Dual Banking System
Banks can be either nationally (federally) chartered or state chartered.
Most large banks are nationally chartered
QUESTIONS AND CORRECT DETAILED ANSWERS (100%
CORRECT VERIFIED SOLUTIONS) A NEW UPDATED VERSION
|ALREADY GRADED A+ BEST DOCUMENT FOR EXAM PREP
Phase 1
In 1980, deregulation freed savings institutions from Regulation Q
and allowed them to raise deposit rates and engage in speculative
lending. Saving institutions suffered high default rates on
mortgages as a result
Phase 2
Chose to not close capital-depleted and insolvent savings
institutions, allowing them to operate (Regulatory Forbearance)
Federal Savings and Loan Insurance Companies (FSLIC)
Failed in the 1980s then depleted the FSLIC funds itself to such
extent that by 1989 it was insolvent
Financial Institutions Reform, Recovery, and Enforcement Act
(FIRREA) of 1989
Abolished the FSLIC and created a new savings association
insurance funds (SAIF) and put under the management of the
FDIC
,Depository Institutions
Financial institutions that are legally allowed to accept deposits
from customers (commercial banks and thrift institutions)
From 1984-2016, the number of commercial banks have
significantly decreased due to changes in size, structure and result of
M&A
Deregulation in Banks
M&A were due to series of financial deregulations
The McFadden Act of 1927
Effectively prohibited banks from branching across state lines
The Glass-Steagall Act of 1933
Separated commercial banking from securities industry
The Riegle Neal Act 1994
Easing branching by banks across state lines
, The Gramm-Leach-Bliley Act of 1999 (Financial Services Modernization
Act)
Full authority to enter the investment banking and insurance business
Banking Consolidation
The banking industry reduced the asset shares of community banks
dramatically
The structure of the banking industry
affects equally of opportunity and upward mobility in society
Equity Multiplier
Fell after the 2008 crisis, regulation of capital was made to not increase
back to how it was before
Dual Banking System
Banks can be either nationally (federally) chartered or state chartered.
Most large banks are nationally chartered
