#1
Which institution regulates banks in the United States?
Federal Reserve System
ExplanationRegulator of US banks
#2
What is the primary purpose of financial reserves in banking?
To cover unexpected losses
ExplanationCovering unforeseen losses
#3
What is the primary function of the Federal Deposit Insurance Corporation (FDIC) in the United States?
To insure deposits in banks
ExplanationInsuring bank deposits
#4
What does the term 'liquidity' refer to in banking?
The ease of converting assets into cash without loss of value
ExplanationEase of asset conversion
#5
What does the term 'interest rate' refer to in banking?
The rate at which banks charge borrowers for loans
ExplanationLoan borrowing rate
#6
Which of the following is a function of the Federal Reserve System?
Regulating the money supply
ExplanationMoney supply regulation
#7
Which of the following is NOT considered a type of financial reserve?
Market reserves
ExplanationNot a type of financial reserve
#8
What is the purpose of the Basel III accord?
To improve banking supervision and risk management
ExplanationEnhancing banking supervision
#9
What is the role of the lender of last resort in the banking system?
To ensure banks have access to emergency funding
ExplanationProviding emergency funds
#10
What does the term 'fractional reserve banking' refer to?
A banking system where banks hold only a fraction of deposits as reserves
ExplanationBanks hold fraction of deposits
#11
What is the role of the central bank in managing monetary policy?
To regulate interest rates and money supply
ExplanationInterest rate and money supply regulation
#12
Which of the following is NOT a tool of monetary policy?
Fiscal policy
ExplanationNon-monetary policy tool
#13
Which term refers to the process of a central bank buying government securities or other securities from the market?
Quantitative easing
ExplanationCentral bank securities purchase
#14
What is the primary purpose of stress testing in banking?
To assess a bank's ability to withstand adverse economic conditions
ExplanationTesting bank resilience
#15
What is the primary objective of quantitative easing (QE)?
To reduce interest rates
ExplanationLowering interest rates
#16
Which of the following is a measure of a bank's profitability?
Net Interest Margin
ExplanationProfitability measure
#17
Which of the following is a function of the Financial Stability Board (FSB)?
Promoting international financial stability
ExplanationGlobal financial stability promotion