1st Set of Homework (Due Date: September 16, 2020) 5. What are the main features of the Financial Modernization Act of 1999? What major impact on commercial banking activity occurred from this legislation? Instruction: There are 10 questions from Chapter 1 and Chapter 2. Each question is 2 points with 20 points total. Chapter 1 6. What are the main features of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010? 1. Identify and explain three problems in direct financing that probably dampen the flow of funds between household savers of funds and corporate users of funds in an economic world without financial institutions. 2 What are agency costs? How do FIs solve the information and related agency costs when household savers invest directly in securities issued by corporations? 3. What are five areas of institution-specific FI specialness and which types of institutions are most likely to be the service providers? 4. What's information asymmetry? What problems could arise because of information asymmetry? What methods does a lender use to address adverse selection problem? What methods does an insurance company use to address moral hazard problem? Chapter 2 1. What are the differences between community banks, regional banks, and money-center banks? Contrast the business activities, location, and markets of each of these bank groups. 2. What types of activities are normally classified as off-balance sheet (OBS) activities? How does an OBS activity move onto the balance sheet as an asset or liability? 3. For each of the following banking organizations, identify which regulatory agencies (OCC, FRB, FDIC, or state banking commission) may have some regulatory supervision responsibility. (a) State-chartered, nonmember, non-holding company bank. (b) State-chartered, nonmember holding company bank (c) State-chartered member bank (d) Nationally chartered non-holding company bank. (Nationally chartered holding company bank 4. What are the main features of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994? What major impact on commercial banking activity occurred from this legislation