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FINA 465 EXAM 1 2026 ACTUAL
QUESTIONS WITH VERIFIED
ANSWERS.
Supervise and Regulate Financial Institutions
- Banks play a critical role in facilitating payments and
safeguarding deposits
- regulation involved setting rules on formation, operating, and
acquisitions
- supervision involves monitoring and examination for
compliance with those rules
- review mergers and acquisitions to ensure they do not harm
competition or consumers
- uses stress testing to assess of large banks can withstand
adverse economic scenarios
Foster Payment and Settlement System Safety
- ensuring the US payment and settlement system is efficient,
effective, and safe
- this system supports financial transactions, including the
purchase of goods and services and the movement of money
across the economy
Promote Consumer Protection and Community
Development
- promotes consumer protection and community development,
ensuring a fair and transparent financial services marketplace
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- writes and reviews regulations
- conducts research on emerging consumer protection issues
Office of the Comptroller of the Currency (OCC)
- the primary regulator/supervisor for national banks and
federally chartered saving associations in the US
Key Functions of OCC include ensuring institutions:
- Operate safely and soundly.
- Provide fair access to financial services.
- Comply with laws and regulations.
- Charters, regulates, and supervises all national banks
Supervisory Role of OCC
- Examines the health and stability of national banks.
- Assesses compliance with consumer protection laws.
- Aims to foster a stable and competitive banking system.
- Helps shape policy and regulations to balance innovation and
oversight.
Federal Deposit Insurance Corporation (FDIC)
- created in 1933 in response to widespread bank failures
during the Great Depression
- mission: maintain stability and public confidence in the US
financial system
Core Responsibilities of the FDIC
- Ensures deposits at banks and savings institutions (up to a
specified limit per depositor).
- Acts as the primary federal regulator for state-chartered, non-
Fed member banks.
- Conducts regular examinations to ensure safe and sound
operations.
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- Helps reduce the risk of bank failures and protect consumers'
deposits
Additional Roles of the FDIC
- Serves as receiver for failed banks:
▪ Facilitates orderly liquidation or restructuring of insolvent
institutions.
- Manages the Deposit Insurance Fund:
▪ Funded by premiums paid by insured banks.
▪ Ensures depositor protection in the event of bank failure.
CAMELS rating
- Capital adequacy
- Asset quality
- Management
- Earnings
- Liquidity
- Sensitivity to market risk
Supervisory Capital Assessment Program (SCAP)
- Goals: predict potential losses under baseline and adverse
economic scenarios, ensure capital adequacy (Treasury would
supply capital if banks couldn't raise it themselves)
- Outcome: helped reassure the public about financial system
stability, raised concern over moral hazard incentives for banks
Comprehensive Capital Analysis and Review (CCAR)
- Banks must: use internal models to test capital adequacy in
adverse scenarios and submit capital plans for approval if
results fall short
- The Federal Reserve also runs its own internal, undisclosed
model to validate bank results, and capital distributions are only
FINA 465 EXAM 1 2026 ACTUAL
QUESTIONS WITH VERIFIED
ANSWERS.
Supervise and Regulate Financial Institutions
- Banks play a critical role in facilitating payments and
safeguarding deposits
- regulation involved setting rules on formation, operating, and
acquisitions
- supervision involves monitoring and examination for
compliance with those rules
- review mergers and acquisitions to ensure they do not harm
competition or consumers
- uses stress testing to assess of large banks can withstand
adverse economic scenarios
Foster Payment and Settlement System Safety
- ensuring the US payment and settlement system is efficient,
effective, and safe
- this system supports financial transactions, including the
purchase of goods and services and the movement of money
across the economy
Promote Consumer Protection and Community
Development
- promotes consumer protection and community development,
ensuring a fair and transparent financial services marketplace
, Page | 2
- writes and reviews regulations
- conducts research on emerging consumer protection issues
Office of the Comptroller of the Currency (OCC)
- the primary regulator/supervisor for national banks and
federally chartered saving associations in the US
Key Functions of OCC include ensuring institutions:
- Operate safely and soundly.
- Provide fair access to financial services.
- Comply with laws and regulations.
- Charters, regulates, and supervises all national banks
Supervisory Role of OCC
- Examines the health and stability of national banks.
- Assesses compliance with consumer protection laws.
- Aims to foster a stable and competitive banking system.
- Helps shape policy and regulations to balance innovation and
oversight.
Federal Deposit Insurance Corporation (FDIC)
- created in 1933 in response to widespread bank failures
during the Great Depression
- mission: maintain stability and public confidence in the US
financial system
Core Responsibilities of the FDIC
- Ensures deposits at banks and savings institutions (up to a
specified limit per depositor).
- Acts as the primary federal regulator for state-chartered, non-
Fed member banks.
- Conducts regular examinations to ensure safe and sound
operations.
, Page | 3
- Helps reduce the risk of bank failures and protect consumers'
deposits
Additional Roles of the FDIC
- Serves as receiver for failed banks:
▪ Facilitates orderly liquidation or restructuring of insolvent
institutions.
- Manages the Deposit Insurance Fund:
▪ Funded by premiums paid by insured banks.
▪ Ensures depositor protection in the event of bank failure.
CAMELS rating
- Capital adequacy
- Asset quality
- Management
- Earnings
- Liquidity
- Sensitivity to market risk
Supervisory Capital Assessment Program (SCAP)
- Goals: predict potential losses under baseline and adverse
economic scenarios, ensure capital adequacy (Treasury would
supply capital if banks couldn't raise it themselves)
- Outcome: helped reassure the public about financial system
stability, raised concern over moral hazard incentives for banks
Comprehensive Capital Analysis and Review (CCAR)
- Banks must: use internal models to test capital adequacy in
adverse scenarios and submit capital plans for approval if
results fall short
- The Federal Reserve also runs its own internal, undisclosed
model to validate bank results, and capital distributions are only
