All Joshua wanted to do was buy an iPhone 11. Instead, he ended up with 55,850 in debt and a personal loan with an annual interest of 29.99 per cent. "I was crying," Joshua says of the moment he realised how high ber interest rate was. Debt from high-interest instalment loans, a reasonably new product, is becoming increasingly common among young people with short credit histories. The Consumer Financial Protection Bureau ensures borrowers are not getting sucked into so-called debt traps by putting in place payday loan regulations that, among other things, require payday lenders to check that borrowers can afford to pay back their loans on time by verifying information like incomes, rent, and even student loan payments. Large banks, including JPMorgan Chase, and Bank of America, do nof provide payday loans but enable borrowers to easily access moncy by making the pre' approved Please Turn ever FINA 2001 Sample Teit - December 2022 ASJ loan available with high-interest rates. Joshua is passionate about his encounter and stated that "These large banks are "Too-Big-to-Fail" (TBTF) and therefore need to be transparent and held accountuble for their actions." Questions: 1. Provide a clear technical explanation of what payday loans are. YYour answer must be accompanied by a list of 2 exainples of Caribbean institutions that provide these services. [7 mariss] 2. Briefly outline the payday loan regulation implicitly declared in the Case. \{You must include the two technical rationales for implementing this type of regulation). [6 matriss] 3. How do we determine whether puyday loan regulations are good or bad? IYou 8. If one of the large banks - JPMorgan Chase, Bank of America - fails, this Act would assist the bank supervisor in resolving the failed institution(s) and discuss two (2) methods the regulator can use to resolve the failing hanks. [10 marks] Please Turn over FINA 2001 Sample Test - December 2022 ASJ The COVID-19 pandemic is a health crisis but can potentially push the Caribbean's financial sector into a banking crisis. 9. Explain how risk assessment can signal an impending financial crisis; name and explain one risk method and suggest how bank supervisors can best monitor the regulatory compliance of banks and non-bank institutions. [9 marks] Selected review question... note this is just a sample. Kindly review the lecture note and accompanying information for the lectures identified above. 1. What is the purpose of financial regulation The Banking Act of 1933 did not make provision for the separation of two core activities of banks. What are these activities, and what was the name Act used to address the loopholes? [5 marks] All Joshua wanted to do was buy an iPhone 11. Instead, he ended up with 55,850 in debt and a personal loan with an annual interest of 29.99 per cent. "I was crying," Joshua says of the moment he realised how high ber interest rate was. Debt from high-interest instalment loans, a reasonably new product, is becoming increasingly common among young people with short credit histories. The Consumer Financial Protection Bureau ensures borrowers are not getting sucked into so-called debt traps by putting in place payday loan regulations that, among other things, require payday lenders to check that borrowers can afford to pay back their loans on time by verifying information like incomes, rent, and even student loan payments. Large banks, including JPMorgan Chase, and Bank of America, do nof provide payday loans but enable borrowers to easily access moncy by making the pre' approved Please Turn ever FINA 2001 Sample Teit - December 2022 ASJ loan available with high-interest rates. Joshua is passionate about his encounter and stated that "These large banks are "Too-Big-to-Fail" (TBTF) and therefore need to be transparent and held accountuble for their actions." Questions: 1. Provide a clear technical explanation of what payday loans are. YYour answer must be accompanied by a list of 2 exainples of Caribbean institutions that provide these services. [7 mariss] 2. Briefly outline the payday loan regulation implicitly declared in the Case. \{You must include the two technical rationales for implementing this type of regulation). [6 matriss] 3. How do we determine whether puyday loan regulations are good or bad? IYou 8. If one of the large banks - JPMorgan Chase, Bank of America - fails, this Act would assist the bank supervisor in resolving the failed institution(s) and discuss two (2) methods the regulator can use to resolve the failing hanks. [10 marks] Please Turn over FINA 2001 Sample Test - December 2022 ASJ The COVID-19 pandemic is a health crisis but can potentially push the Caribbean's financial sector into a banking crisis. 9. Explain how risk assessment can signal an impending financial crisis; name and explain one risk method and suggest how bank supervisors can best monitor the regulatory compliance of banks and non-bank institutions. [9 marks] Selected review question... note this is just a sample. Kindly review the lecture note and accompanying information for the lectures identified above. 1. What is the purpose of financial regulation The Banking Act of 1933 did not make provision for the separation of two core activities of banks. What are these activities, and what was the name Act used to address the loopholes? [5 marks]
