Financial Compliance

Question 1: The Trading Desk at the Federal Reserve Bank of New York elects to sell $100 mil- lion in U.S. government securities to its list of primary dealers. If other factors are held constant, what is likely to happen to the supply of legal reserves available? To deposits and loans? To interest rate? (Must be at least 100 words)


Question 2: Information about new charters for national banks can be found at Find the Comptroller’s Licensing Manual for Charters, and summarize the organizing group’s role in seeking a charter for a new bank. (Must be at least 100 words)



Question 3: Bank trading in futures and options by financial firms is often subject to strict regula- tions. For example, you can find out about the rules and regulatory supervision of banks (BHCs) in the Federal Reserve’s Trading and Capital-Markets Activity Manual, found at Using the index locate “Regulation, Compliance with.” After reading this page, discuss which regulations and regulators are involved with futures, options, and swap activities. (Must be at least 100 words)


Question 4: With reference to the BHCs mentioned in exercise 1, what was their ratio of cash and due from depository institutions to total assets at last year’s year-end? Do you notice any significant trends in their liquidity position that you think have also affected the banking industry as a whole? Examine the ratios for all FDIC-insured banks. This can also be accomplished at  (Must be at least 100 words)


Question 5: This chapter has multiple goals. One of the most important is to learn about the different types of deposits financial institutions offer and, from the perspective of a manager, to discover which types of deposits are among the most profitable to offer their customers. We also want to explore how an institution’s cost of funding can be determined and examine the different methods open to institutions to price the depoWhich depository institutions currently quote the highest interest rates on checking accounts? Savings accounts? Money market deposits? Three- and six-months CDs? Visit, and for thesits and deposit-related services they sell to the public. (Must be at least 100 words)


Question 6: In this chapter you have been introduced to a number of instruments used for liability management. Repurchase agreements are always a challenge. To learn a little more about these instruments go to

. Who are the major participants in the RP market? (Must be at least 100 words)


Question 7: Please comment on the statement “One fundamental purpose for regulating capital is to limit losses to the government and other institutions arising from deposit insurance claims.”. Is the statement true or false. Why? (Must be at least 100 words)



Question 8: Financial institutions that disagree with an examiner’s classifications of their loans can appeal against these ratings.  Is the statement true or false. Why? (Must be at least 100 words)




Question 9: Customers who apply for credit have the right to receive a written notice along with the reasons for denial if their loan request is turned down by a bank. Is the statement true or false. Why?  (Must be at least 100 words)



Question 10: If a bank with a higher stock price-to-earnings ratio acquires a bank with a lower price-earnings ratio, earnings per share of the combined organization will increase, even if combined earnings fall after the merger. Is the statement true or false. Why? (Must be at least 100 words)




Question 11: The International Lending and Supervision Act does not require federal regulators to supervise the U.S. banks under their jurisdiction more closely but to give banks and the private marketplace more freedom in deciding what their capital requirements should be. Is the statement true or false. Why?

(Must be at least 100 words)


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