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Money, Banking, and Financial Markets Practice Test: The Banking Industry
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The US banking industry is dominated by four large banks: JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup. These four banks are among the largest in the world, and almost all banks in the country are insured by the Federal Deposit Insurance Corporation (FDIC). The US banking system has a unique structure called the dual banking system, where banks are licensed on either the national or state level, and are overseen by different regulatory agencies depending on their license level.  Here are some other characteristics of the US banking industry: The US has more commercial banks... Show more
Money, Banking, and Financial Markets Practice Test: The Banking Industry
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25 Questions

1. Both ________ and ________ were financial innovations that occurred because of interest rate risk volatility.
2. The legislation overturning the Glass-Steagall Act is
3. The most important source of the changes in supply conditions that stimulate financial innovation has been the
4. A major controversy involving the banking industry in its early years was
5. A financial innovation that developed as a result of banks avoidance of bank branching restrictions was ________.
6. In this type of arrangement, any balances above a certain amount in a corporationʹs checking account at the end of the business day are ʺremovedʺ and invested in overnight securities that pay the corporation interest. This innovation is referred to as a
7. Bank consolidation will likely result in
8. One factor contributing to the decline in cost advantages that banks once had is the
9. Banks have attempted to maintain adequate profit levels by
10. The most important developments that have reduced banks income advantages in the past thirty years include:
11. Although the National Bank Act of 1863 was designed to eliminate state -chartered banks by imposing a prohibitive tax on banknotes, these banks have been able to stay in business by
12. The U.S. banking system is considered to be a dual system because
13. Because of the abuses by state banks and the clear need for a central bank to help the federal government raise funds during the War of 1812, Congress created the
14. Which of the following statements concerning bank regulation in the United States are true?
15. Prior to 2008, bank managers looked on reserve requirements
16. The modern commercial banking system began in America when the
17. The development of money market mutual funds contributed to the growth of ________ since the money market mutual funds need to hold liquid, high-quality, short-terms assets.
18. The agreement to provide a standardized commodity to a buyer on a specific date at a specific future price is
19. Uncertainty about interest-rate movements and returns is called ________.
20. Bank customers perceive Internet banks as being
21. Loophole mining refers to financial innovation designed to
22. The legislation that separated investment banking from commercial banking until its repeal in is known as the:
23. New computer technology has
24. Disintermediation resulted from
25. Critics of nationwide banking fear

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