Unformatted text preview: the ³ederal Reserve Bank 9. When are banks subject to prosecu±on? ´hey fail to maintain systems for iden²fying and repor²ng suspicious ac²vi²es that indicate possible drug transac²ons and money laundering. 10. What program was designed to reduce terrorism risks, requires banks to be´er know the customer’s true iden±ty? USA PA´RIO´ Act 11. What is the Automated Clearing House? Is an electronic funds transfer system that provides interbank clearing of electronic payments for the na²on’s ±nancial ins²tu²ons 12. What two United Na±ons agencies help to Fnance interna±onal trade? ´he World Bank and the Interna²onal Monetary ³und 13-17 Start with a $1,000 deposit and assume a reserve requirement of 15 percent. Trace the amount of money created by the banking system a³er Fve lending cycles. Cycle 1: $1,000 X .85 =$850.00 Cycle 2: 850X.85 = 722.50 Cycle 3: 722.50X.85= 614.12 Cycle 4: 614.12X.85= 522.00 Cycle 5: 522X.85 = 443.70 $4,152.32 (+315%)...
View Full Document
- Spring '14
- Federal Reserve System, Federal Reserve bank, reserve requirement, Federal Reserve District