1. Currency exchange stability is an important goal of the Saudi Ministry of Commerce and Industry.

a. What are the advantages of currency exchange stability for Saudi Arabia? Explain with examples.

b. What are the disadvantages of currency exchange stability for Saudi Arabia? Explain with examples.

c. How does Saudi Arabia maintain currency exchange stability? Explain with examples.

2. The political independence of central banks is an increasingly important issue in the global economy.

What is the global trend in the political independence of central banks?

Is this good or bad for the global economy? Explain with examples.

What are the advantages and disadvantages to individual countries? Explain with examples.

3. Bank regulators are required to examine and report on the health of financial institutions.

a. How does the bank reserve ratio requirement affect its lending ability?

b. How does Loophole Mining help banks avoid their reserve requirements?

c. How do money market mutual funds allow banks to avoid reserve requirements?

4. The deregulation of US banking industry preceded the 2008 Financial Crisis by less than a decade.

What were the objectives of original Glass-Steagall Act in 1933?

What were the consequences of its repeal in 1999?

Why are there increasing demands to reinstate Glass-Steagall today? Do you agree? Why or why not?

5. In the context of global cycles of financial expansion and contraction, which provisions do you believe are most important? Which ones are least important? Explain with examples.The 2000s witnessed a dramatic increase in Financial Engineering that produced a wide range of new loans and investment products.

What is Financial Engineering?

Provide examples of Financial Engineering that have produced new consumer loan products and investment securities.

How did Financial Engineering affect Adverse Selection and Moral Hazard problems prior to the 2008 Financial Crisis?

6. The management of risk is crucial to the profitability of banks.

a. What are the most important risk management principles that involve approving loans?

b. What is Adverse Selection? What is Moral Hazard? Why do they make the underwriting process for lending more complicated?

c. Is the loan approval process different in Western/International banks in comparison to Islamic banks? Explain with examples.

7. National or Central Banks are the Lenders of Last Resort.

a. What is the importance of being the Lender of Last Resort?

b. What role did the US Treasury play in stabilizing the US Financial System?

c. What is your biggest fear of this role of Central banks?

8. In the Aftermath of the 2008 Financial Crisis, the 2010 Dodd-Frank Act specified policies regarding Too Big To Fail Banks.

a. Explain what is a Too Big To Fail Bank. Provide examples.

b. What are the concerns of the rise of these types of financial institutions? Give specific examples.

c. What are the criticisms of policies designed to regulate Too Big To Fail Banks. What is your recommendation: more or less government regulation?

9. Interest-Rate Risk is a crucial issue in bank management.

a. What are the implications to bank management when interest rates are rising? Explain with examples.

b. What are the implications to bank management when interest rates are falling? Explain with examples.

c. What role does asset transformation play in managing a profitable bank? Explain with examples.

10. Financial Engineering played a crucial role in the 2008 Financial Crisis.

a. Explain what is financial engineering. Explain with examples.

b. What are Asset Back Securities (ABS). Explain with examples.

c. Explain why the decline in the US housing market led to a global financial crisis. Explain with examples.