12. Which of the following is likely to happen when a number of banks operating in a cell rises?

a) Increasing competition leading to more intense financial engineering

b) Widening profit margin due to more competition.

c) Higher market concentration in the cell.

d) All of the above

e) a) and b) of the above

13. Which of the following is a NOT source of competitive advantage in banking?

a) Adequacy of capital base

b) Reputation for institutional risk management

c) Quality of human capital in risk assessment and management

d) Product and trade related information advantage

e) Existence of extensive government regulation and protection of bank capital and deposit

f) b) and e) of the above

14. Which of the following is NOT correct about the Glass-Steagall Act?

a) The Glass-Steagall Act was enacted due to potential conflict of interest in commercial banks engaging in investment business (e.g. conflict of interest in commercial bank security underwriting)

b) The Glass-Steagall Act was enacted to protect local banks from competitive

pressure

c) The Glass-Steagall Act was enacted to protect deposits from the risk in

investment banking business

d) Banks were able to circumvent the regulation by forming a BHC

e) band dof the above

11. Which of the following is a relevant factor behind the internationalization of Japanese banks?

a) Desire to service their corporate clients who expand their operations to foreign countries.

b) Domestic regulations that limited their growth potentials in Japan

c) Technical superiority of the Japanese banks which led to their low cost of funds.

d) The competitive advantage in accessing cheap source of funds in the major international money markets

e) (a) and (d) of the above