1. Empirical evidence about the link between deposit insurance and banking crisis found that:

A. Deposit insurance always decrease the chance of a banking crisis B. Deposit insurance always increase the chance of a banking crisis C. the effects of deposit insurance on a banking crisis depend on other bank regulations D. weak bank supervisions makes deposit insurance less likely to produce a banking crisis

2. The Basel Accords failed to prevent the financial crisis of 2007-2009 because:

A. the rules were too easy to circumvent B. contries did not have time to adopt the modified Basel 2 rules C.The uninted states and european countries did not agree on the rules D. banks did not have sufficient flexibility to meet the capital requirements

3. Poor information about a bank's balance sheet can lead to

A. high interest rates B. a bank run C. high inflation rates D. a bank takeover

4. If a bank's assets are 200 and the value of its weighted assets is 100, which is more restrictive capital requirement, the U.S minimum equity ratio or the basel accord requirement

A. The basel accod is more restrictive B. They are the same C. The U.S ratio is more restrictive D. There is not enough information provided to the answer

5. Basel 2 differes from the original basel accords in that basel 2

A. gives banks the chance to own stocks B. allows different risk weights for the same kind of bond C. no longer has a capital requirement D. requires bank to provide full disclosure.

6 By insuring bank deposits up to _____, the FDIC reduced the probability of ______

A. 1 million, liquidity crisis B. 100,000, a bank run C. 100,000; banks making risky loans D. 1000; depositors leaving large amounts of money in their checkable deposit accounts

7. After a bank recieves a charter, it is regulated to prevent

A. liquidity risk B. adversion selection C. moral hazard D. aggressive borrowing

8. If a bank's asset are 200, what are the capital requirements under the U.S minumum equity ratio and the Basel Accord requirment?

A. the united states: 10; the basel accord: 16

B. the united states: 16; the basel accord: 10

C. the united states: 10: the basel accord: 10

D. There is not enough information loans for cents on the dollar

9. Deposit insurance increases which of the following? I. moral hazard II. decrease risk taking III. lower interest rate

A. I only B. II only C. III only D. I and II