金融市场与机构（第六版）测试银行 ch20.docx

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1、Financial Markets and Institutions, 6e (Mishkin/Eakins)Chapter 20 Banking Regulation20.1 Multiple Choice1) During the boom years of the 1920s, bank failures were quiteA) uncommon, averaging less than 30 per year.B) uncommon, averaging less than 100 per year.C) common, averaging about 600 per year.D)

2、 common, averaging about 2000 per year.Answer: CQuestion Status: Previous Edition2) When one party to a transaction has incentives to engage in activities detrimental to the other party, there exists a problem ofA) moral hazard.B) split incentives.C) ex ante shirking.D) pre-contractual opportunism.A

3、nswer: AQuestion Status: Previous Edition3) Moral hazard is an important consequence of insurance arrangements because the existence of insuranceA) provides increased incentives for risk taking.B) impedes efficient risk taking.C) causes the private cost of the insured activity to increase.D) both A

4、and B of the above.E) both B and C of the above.Answer: AQuestion Status: Previous Edition4) Since depositors, like any lender, only receive fixed payments while the bank keeps any surplus profits, they face the problem that banks may take on too risk.A) adverse selection; littleB) adverse selection

5、; muchC) moral hazard; littleD) moral hazard; muchAnswer: DQuestion Status: Previous Edition5) The existence of deposit insurance can increase the likelihood that depositors will need deposit protection, as banks with deposit insuranceA) are likely to take on greater risks than they otherwise would.

6、B) are likely to be too conservative, reducing the probability of turning a profit.C) are likely to regard deposits as an unattractive source of funds due to depositors1 demands for safety.D) are placed at a competitive disadvantage in acquiring funds.Answer: AQuestion Status: Previous Edition8) Acc

7、ording to some economists, Congress made a mistake when it passed the FDICIA of not requiring the FDIC to assess risk-based insurance premiums.Answer: FALSEQuestion Status: Previous Edition9) The utoo big to fail policy reduces the adverse selection problem in bank regulation. Answer: FALSEQuestion

8、Status: Previous Edition10) A better capitalized bank has more to lose when it fails and is less likely to take less risk. Answer: TRUEQuestion Status: Previous Edition11) When the payoff method is used to resolve a failed bank, both large and small depositors are protected from su仔ering losses.Answ

9、er: FALSEQuestion Status: Previous Edition20.3 Essay1) What do we learn about the causes of banking crises by comparing crises throughout the world to those that have occurred in the United States?Question Status: Previous Edition2) What is the asymmetric information problem and how does it contribu

10、te to our understanding of the structure of bank regulation in the United States and other countries? Question Status: Previous Edition3) Why did the United States experience a banking crisis in the 1980s?Question Status: Previous Edition4) How has bank regulation in the United States changed since

11、the late 1980s? What accounts for these changes?Question Status: Previous Edition5) How have bank capital requirements changed since the banking crisis of the 1980s? Explain. Question Status: Previous Edition6) Describe the CAMELS rating system used by bank examiners.Question Status: Previous Editio

12、n7) Why does the safety net created by deposit insurance increase the advere selection and moral hazard problems in banking? How do bank regulations attempt to overcome these problems?Question Status: Previous Edition6) Although the FDIC was created to prevent bank failures, its existence encourages

13、 banks to A) take too much risk.B) hold too much capital.C) open too many branches.D) buy too much stock.Answer: AQuestion Status: Previous Edition7) When bad drivers line up to purchase collision insurance, automobile insurers are subject to theA) moral hazard problem.B) adverse selection problem.C

14、) assigned risk problem.D) ill queue problem.Answer: BQuestion Status: Previous Edition8) Deposit insuranceA) attracts risk-prone entrepreneurs to the banking industry.B) encourages bank managers to take on greater risks than they otherwise would.C) reduces the incentives of depositors to monitor th

15、e riskiness of their banks asset portfolios.D) does all of the above.E) does only A and B of the above.Answer: DQuestion Status: Previous Edition9) The possibility that the failure of one bank can hasten the failure of other banks is called the A) bank run e仔ect.B) moral hazard effect.C) contagion e

16、ffect.D) adverse selection effect.Answer: CQuestion Status: Previous Edition10) If the FDIC decides that a bank is too big to fail, it will use the method, e仔ectivelyensuring that depositors will suffer losses.A) payoff; largeB) payoff; noC) purchase and assumption; largeD) purchase and assumption;

17、noAnswer: DQuestion Status: Previous Edition11) If the FDIC uses the purchase and assumption method to handle a failed bank,A) all deposits will su仔er losses.B) small deposits will be paid in full but deposits over the insurance limit will not.C) all deposits will be paid in full.D) none of the abov

18、e.Answer: CQuestion Status: Previous Edition12) One problem of the too-big-to-fail policy is that it the incentives for bybig banks.A) reduces; moral hazard by big banks.B) increases; moral hazard by big banks.C) reduces; adverse selection by big banks.D) increases; adverse selection by big banks.An

19、swer: BQuestion Status: Previous Edition13) The result of the too-big-to-fail policy is that banks will take on risks,making bank failures more likely.A) small; fewerB) small; greaterC) large; fewerD) large; greaterAnswer: DQuestion Status: Previous Edition14) The too-big-to-fail policyA) exacerbate

20、s moral hazard problems.B) puts large banks at a competitive disadvantage in attracting large deposits.C) treats large depositors of small banks inequitably when compared to depositors of large banks.D) does only A and C of the above.Answer: DQuestion Status: Previous Edition15) The primary differen

21、ce between the payoff* and the “purchase and assumption” methods of handling failed banks is that the FDICA) guarantees all deposits, not just those under the $100,000 limit, when it uses the payoff method.B) guarantees all deposits, not just those under the $100,000 limit, when it uses the purchase

22、 and assumption1 method.C) is more likely to use the payoff” method when the bank is large and it fears that depositor losses may spur business bankruptcies and other bank failures.D) both A and B of the above.E) both B and C of the above.Answer: BQuestion Status: Previous Edition16) The primary dif

23、ference between the payoff and the purchase and assumption11 methods of handling failed banks is that the FDICA) guarantees all deposits, not just those under the $100,000 limit, when it uses the payoff1 method.B) guarantees all deposits, not just those under the $100,000 limit, when it uses the pur

24、chase and assumption11 method.C) is less likely to use the payoff method when the bank is large and it fears thatdepositor losses may spur business bankruptcies and other bank failures.D) both A and B of the above.E) both B and C of the above.Answer: EQuestion Status: Previous Edition17) Regulators

25、attempt to reduce the riskiness of banks1 asset portfolios byA) limiting the amount of loans in particular categories or to individual borrowers.B) prohibiting banks from holding risky assets such as common stocks.C) establishing a minimum interest rate floor that banks can earn on certain assets.D)

26、 doing all of the above.E) doing only A and B of the above.Answer: EQuestion Status: Previous Edition18) One way for bank regulators to assure depositors that a bank is not taking on too much risk is to require the bank toA) diversify its loan portfolio.B) reduce its equity capital.C) reduce the siz

27、e of its loan portfolio.D) do both A and B of the above.E) do both B and C of the above.Answer: AQuestion Status: Previous Edition19) Banks do not want to hold too much capital becauseA) they do not bear fully the costs of bank failures.B) higher returns on equity are earned when bank capital is sma

28、ller, all else equal.C) higher capital levels attract the scrutiny of regulators.D) all of the above.E) only A and B of the above.Answer: EQuestion Status: Previous Edition20) The increased integration of financial markets across countries and the need to make the playing field equal for banks from

29、different countries led to the Basel agreement toA) standardize bank capital requirements internationally.B) reduce, across the board, bank capital requirements in all countries.C) sever the link between risk and capital requirements.D) do all of the above.Answer: AQuestion Status: Previous Edition2

30、1) Under the Basel Plan,A) assets and off-balance sheet activities are assigned to various categories to reflect the degree of credit risk.B) a banks total capital must equal or exceed 8 percent of total risk-adjusted assets.C) both of the above.D) none of the above.Answer: CQuestion Status: Previou

31、s Edition22) Of the following assets, the one which has the highest capital requirement under the Basel Accord isA) municipal bonds.B) residential mortgages.C) commercial paper.D) securities issued by industrialized countries governments.Answer: CQuestion Status: Previous Edition23) Which of the fol

32、lowing is not true regarding the Basel 2 proposal to reform the original 1988 Basel Accord?A) It attempts to link capital requirements more closely to actual risk by expanding the number of risk categories.B) It focuses on assessing the quality of risk management in banking institutions.C) It attemp

33、ts to improve market discipline by requiring increased disclosure of pertinent information about banks.D) It has been well received by banks and national regulatory agencies.Answer: DQuestion Status: Previous Edition24) Ways in which bank regulations reduce the adverse selection and moral hazard pro

34、blems in banking includeA) a chartering process designed to prevent crooks from getting control of a bank.B) restrictions that prevent banks from acquiring certain risky assets, such as common stocks.C) high bank capital requirements to increase the cost of bank failure to the owners.D) all of the a

35、bove.E) only A and B of the above.Answer: DQuestion Status: Previous Edition25) The chartering process is especially designed to deal with the problem, andregular bank examinations help to reduce the problem.A) adverse selection; adverse selectionB) adverse selection; moral hazardC) moral hazard; ad

36、verse selectionD) moral hazard; moral hazardAnswer: BQuestion Status: Previous Edition26) The chartering process is especially designed to deal with the problem, andrestrictions on asset holdings help to reduce the problem.A) adverse selection; adverse selectionB) adverse selection; moral hazardC) m

37、oral hazard; adverse selectionD) moral hazard; moral hazardAnswer: BQuestion Status: Previous Edition27) Regular bank examinations and restrictions on asset holdings indirectly help to reduce the problem because, given fewer opportunities to take on risk, risk-prone entrepreneurs will be discouraged

38、 from entering the banking industry.A) moral hazardB) adverse selectionC) ex post shirkingD) post-contractual opportunismAnswer: BQuestion Status: Previous Edition28) Regular bank examinations and restrictions on asset holdings indirectly help tothe adverse selection problem because, given fewer opp

39、ortunities to take on risk, risk-prone entrepreneurs will be from entering the banking industry.A) increase; encouragedB) increase; discouragedC) reduce; encouragedD) reduce; discouragedAnswer: DQuestion Status: Previous Edition29) The legislation that separated commercial banking from the securitie

40、s industry is known as theA) National Bank Act.B) Federal Reserve Act.C) Glass-Steagall Act.D) McFadden Act.Answer: CQuestion Status: Previous Edition30) The Depository Institutions Deregulation and Monetary Control Act of 1980A) approved NOW accounts nationwide.B) restricted the use of ATS accounts

41、.C) imposed interest rate ceilings on bank loans.D) did all of the above.Answer: AQuestion Status: Previous Edition31) The Depository Institutions Deregulation and Monetary Control Act of 1980A) approved NOW accounts nationwide.B) imposed uniform reserve requirements.C) mandated the phase out of int

42、erest rate ceilings on deposits.D) did all of the above.E) did only A and B of the above.Answer: DQuestion Status: Previous Edition32) As a way of stemming the decline in the number of savings and loans and mutual savings banks, the Garn-St. Germain Act of 1982 allowedA) money market certificates.B)

43、 money market mutual funds.C) money market deposit accounts.D) negotiable order of withdrawal accounts.Answer: CQuestion Status: Previous Edition33) An impact of the Garn-St. Germain Act of 1982 has been toA) put savings and loans at a competitive disadvantage.B) make the banking system more competi

44、tive.C) give money market mutual funds a competitive advantage.D) do both A and B of the above.E) do both A and C of the above.Answer: BQuestion Status: Previous Edition34) Moral hazard and adverse selection problems increased in prominence in the 1980sA) as deregulation opened up more avenues for s

45、avings and loans and mutual savings banks to take on more risk.B) following a burst of financial innovation in the 1970s and early 1980s that produced new financial instruments and markets, thereby widening the scope for risk taking.C) following an increase in federal deposit insurance from $40,000

46、to $100,000.D) all of the above.E) only A and B of the above.Answer: DQuestion Status: Previous Edition35) Moral hazard and adverse selection problems increased in prominence in the 1980sA) as deregulation opened up more avenues for savings and loans and mutual savings banks to take on more risk.B)

47、following a burst of financial innovation in the 1970s and early 1980s that produced new financial instruments and markets, thereby widening the scope for risk taking.C) following a decrease in federal deposit insurance from $100,000 to $40,000.D) all of the above.E) only A and B of the above.Answer

48、: EQuestion Status: Previous Edition36) The Federal Deposit Insurance Corporation Improvement Act of 1991A) increased the FDICs ability to borrow from the Treasury to deal with failed banks.B) reduced the scope of deposit insurance in several ways.C) eliminated governmentally-administered deposit ins