the economics of money, banking, and financial markets

286 $

© 2014 Pearson Canada Inc.$

4. 
   

   The Basel Committee ruled that regulators in other countries could ____ of a foreign
   bank if they feel that it lacks effective oversight.
   A) restrict operations
   B) ban operations
   C) takeover
   D) merge operations
   Answer: A
   Diff: 1 Type: MC Page Ref: 225
   Skill: Recall
   Objective List: 10.2 Characterize the 1980s Canadian banking crisis

   
   


5. 
   

   The Inspector General of Banks was the predecessor of the ____.
   A) Office of the Superintendent of Financial Institutions
   B) Office of Regulatory Forbearance
   C) Canadian Commercial Regulatory Committee
   D) Basel Committee
   Answer: A
   Diff: 1 Type: MC Page Ref: 225
   Skill: Recall
   Objective List: 10.2 Characterize the 1980s Canadian banking crisis

   
   


6. 
   

   Sometimes regulators refrain from putting insolvent banks out of business. This is also known
   as ____.
   A) a decrease in deposit insurance
   B) a decrease in interest rates to fight the inflation problem
   C) regulatory forbearance
   D) increased regulation that prohibited banks from making risky loans
   Answer: C
   Diff: 1 Type: MC Page Ref: 226
   Skill: Applied
   Objective List: 10.2 Characterize the 1980s Canadian banking crisis

   
   


7. 
   

   Bank failures in Canada arose due to historical accident, including ____ and ____.
   A) sharp increase in interest rates; severe recession
   B) sharp increase in interest rates; a housing boom
   C) sharp decrease in interest rates; severe recession
   D) sharp decrease in interest rates; a housing bubble
   Answer: A
   Diff: 1 Type: MC Page Ref: 226
   Skill: Recall
   Objective List: 10.2 Characterize the 1980s Canadian banking crisis