Question 1

The major provisions of the Competitive Equality in Banking Act of 1987 included

Accepted Answer

A)  expanding the responsibilities of the FDIC, which is now the sole administrator of the federal deposit insurance system.
B)  establishing the Resolution Trust Corporation to manage and resolve insolvent thrifts placed in conservatorship or receivership.
C)  directing the Federal Home Loan Bank Board to continue to pursue regulatory forbearance.
D)  all of the above.
E)  only A and B of the above.F) B) and E)
G) B) and C)

Question 2

In the early stages of the banking crisis in the 1980s, financial institutions were especially hurt by

Accepted Answer

A)  the sharp increases in interest rates from late 1979 until 1981.
B)  the severe recession in 1981-82.
C)  the sharp decline in the price level from mid-1980 to early 1983.
D)  all of the above.
E)  only A and B of the above.F) A) and B)
G) B) and C)

Question 3

(I) S&Ls' net worth ratio is about the same as that of commercial banks. (II) Goodwill accounts for a majority of S&Ls' capital.

Accepted Answer

A)  (I) is true, (II) false.
B)  (I) is false, (II) true.
C)  Both are true.
D)  Both are false.E) A) and B)
F) A) and C)

Question 4

Which of the following statements concerning the mutual form of ownership of savings banks are true?

Accepted Answer

A)  The mutual form of ownership accentuates the principal-agent problem that exists in corporations.
B)  More capital is available, contributing to the safety of mutual savings banks compared to other banking organizations.
C)  Managers of mutual savings banks are more risk averse than in the corporate form, because the value of their ownership does not increase if the firm does well.
D)  All of the above are true.
E)  Only A and B of the above are true.F) A) and E)
G) B) and D)

Question 5

The policy of regulatory forbearance

Accepted Answer

A)  meant delaying the closing of "zombie S&Ls" as their losses mounted during the 1980s.
B)  benefited "zombie S&Ls" at the expense of healthy S&Ls, as healthy institutions lost deposits to insolvent institutions.
C)  contributed to declining profitability in the S&L industry and an increase in the number of "zombie S&Ls."
D)  did all of the above.
E)  did only A and B of the above.F) A) and D)
G) None of the above

Question 6

Savings and loans lost a total of $10 billion in 1981-1982 due to a combination of rising interest rates in 1979-1981 and

Accepted Answer

A)  the recession of 1981-1982 that reduced real estate prices enough to cause significant loan defaults.
B)  the regulatory restrictions enacted by Congress in 1981 and 1982.
C)  the loss of market share to commercial banks that were allowed to compete directly with thrifts in the real estate market.
D)  the acceleration of inflation in 1981-1982 that caused thrifts to lose additional funds to money market mutual funds.E) B) and D)
F) A) and C)

Question 7

The major provisions of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 included

Accepted Answer

A)  transferring the regulatory role of the Federal Home Loan Bank Board to the Office of Thrift Supervision, a bureau within the U.S. Treasury Department.
B)  expanding the responsibilities of the FDIC, which is now the sole administrator of the federal deposit insurance system.
C)  establishing the Resolution Trust Corporation to manage and resolve insolvent thrifts placed in conservatorship or receivership.
D)  all of the above.
E)  only A and B of the above.F) B) and D)
G) B) and E)

Exam 25: Savings Associations and Credit Unions

The major provisions of the Competitive Equality in Banking Act of 1987 included

Correct Answer
verified

Savings and loans lost a total of $10 billion in 1981-1982 due to a combination of rising interest rates in 1979-1981 and

Correct Answer
verified

Which of the following statements concerning the mutual form of ownership of savings banks are true?

Correct Answer
verified

In the early stages of the banking crisis in the 1980s, financial institutions were especially hurt by

Correct Answer
verified

(I) S&Ls' net worth ratio is about the same as that of commercial banks. (II) Goodwill accounts for a majority of S&Ls' capital.

Correct Answer
verified

The policy of regulatory forbearance

Correct Answer
verified

The major provisions of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 included

Correct Answer
verified

Exam 25: Savings Associations and Credit Unions

The major provisions of the Competitive Equality in Banking Act of 1987 included

Correct AnswerverifiedShow Answer

Savings and loans lost a total of $10 billion in 1981-1982 due to a combination of rising interest rates in 1979-1981 and

Correct AnswerverifiedShow Answer

Which of the following statements concerning the mutual form of ownership of savings banks are true?

Correct AnswerverifiedShow Answer

In the early stages of the banking crisis in the 1980s, financial institutions were especially hurt by

Correct AnswerverifiedShow Answer

(I) S&Ls' net worth ratio is about the same as that of commercial banks. (II) Goodwill accounts for a majority of S&Ls' capital.

Correct AnswerverifiedShow Answer

The policy of regulatory forbearance

Correct AnswerverifiedShow Answer

The major provisions of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 included

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified