1. Discuss how the use of a national currency happened in the U.S. You should cite two relevant acts and describe how each played a role in the successful establishment of a national currency. [4] 2. Consider a small local bank, American River Bank. This is a relatively small depository institution, compared with bank holding companies like Bank of America, Citigroup, and Wells Fargo. Thinking about regulatory changes in the U.S. banking system, why do so many small and medium-sized depository institutions like American River Bank exist? Discuss how key provisions of the McFadden Act (1927) led to the establishment of smaller banks. What was the motivation for this act? [4] 3. Based on the data presented in class and the textbook, what do you expect to happen to the number of depository institutions in the U.S. in the future? Cite any relevant banking acts that might affect the number of small and medium-sized banks in the U.S. [3] 4. American River Bank is a state non-member bank. Which institution serves as its primary regulator? Do not use abbreviations. [1] 5. Because of regulatory changes in 1980, suppose that American River Bank maintains its ROA and attracts new depositors by offering higher interest rates on time deposits. What version of bank balance sheet management is this related to? Define the bank balance sheet management version and how it applies to this situation. [3] 6. In 1981, the U.S. entered an economic recession. How would this affect the credit quality of American River Bank's balance sheet? Explain in some detail. [3] 7. The Federal Reserve System, FDIC, and the federal government have proposed stricter capital requirements on banks. Banks would be required to hold more capital. [8] (a) Why would the banks' shareholders ("private equity investors") oppose the proposed regulatory change? Why would the FDIC ("regulators") support this regulatory change? Explain in some detail, citing the following (link these concepts to your answer to (a)): (b) the challenges in the regulatory structure of U.S. banking (cite at least one banking act or regulation - other than the ones you cited above -- that directly applies to this case and explain why), (c) past lessons from banking crises (cite at least one historical example of a banking crisis - other than the 2007-09 financial crisis - and the challenges therein).