ch2 - ch2Key

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ch2 Key 1. The _____________________ was created as part of the Glass Steagall Act. In the beginning it insured deposits up to $2,500. FDIC Rose - Chapter 02 #1 2. The________________________ is the law that states that a bank must get approved from their regulatory body in order to combine with another bank. Bank Merger Act Rose - Chapter 02 #2 3. One tool that the Federal Reserve uses to control the money supply is _________________. The Federal Reserve will buy and sell T-bills when they are using this tool of monetary policy. open market operations Rose - Chapter 02 #3 4. The__________________________ was created in 1913 in response to a series of economic depressions and failures. Its principal role is to serve as the lender of last resort and to stabilize the financial markets. Federal Reserve Rose - Chapter 02 #4 5. The __________________________ prevented banks from crossing state lines and made national banks subject to the branching laws of their state. This act was later repealed by the Riegle Neal Interstate Banking law. McFadden-Pepper Act Rose - Chapter 02 #5
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6. Because the FDIC levies fixed insurance premiums regardless of risk, this leads to a problem called the ____________________ among banks. The fixed premiums encourage all banks to accept greater risk. moral hazard Rose - Chapter 02 #6 7. In 1980, __________________________ was passed and lifted government ceilings on deposit interest rates in favor of free market interest rates. DIDMCA Rose - Chapter 02 #7 8. One tool that the Federal Reserve uses to control the money supply is _________________. The Federal Reserve will change the interest rate they charge for short term loans when they are using this tool of monetary policy. changing the discount rate Rose - Chapter 02 #8 9. The first major federal banking law in the U.S. was the __________________________. This law was passed during the Civil War and set up a system for chartering national banks and created the OCC. National Banking Act Rose - Chapter 02 #9 10. The_________________________ was passed during the Great Depression. It separated investment and commercial banks and created the FDIC. Glass-Steagall Act Rose - Chapter 02 #10 11. The__________________________ brought bank holding companies under the jurisdiction of the Federal Reserve. Bank Holding Company Act Rose - Chapter 02 #11
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12. The__________________________ allows bank holding companies to acquire banks anywhere in the United States. However, no one bank can control more than 30 percent of the deposits in any one state or more than 10 percent of the deposits across the country. Riegle-Neal Interstate Banking Act Rose - Chapter 02 #12 13. The _____________________________ allows banks to affiliate with insurance companies and securities firms either through a holding company or as a subsidiary. Gramm-Leach-Bliley Act (Financial Services Modernization Act)
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ch2 - ch2Key

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