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Which of the following are true statements?
A) Schedule I banks have more powers than Schedule II banks.
B) A Schedule II bank may enter the Canadian banking industry only as a Schedule II bank.
C) A Schedule II bank may have a significant shareholder (more than 10 percent) for up to 10
years after chartering.
D) A foreign bank may enter the Canadian banking industry only as a Schedule III bank.
Answer: C
Diff: 1 Type: MC Page Ref: 252
Skill: Recall
Objective List: 11.3 Differentiate between chartered banks and near banks (i.e., trust and
mortgage loan companies, and credit unions and caisses populaires)
The difference between a Schedule II and a Schedule III bank is that ____.
A) a Schedule II bank is a Canadian subsidiary of a foreign bank
B) a Schedule III bank is a foreign bank is not allowed to branch directly into Canada
C) a foreign bank may enter the Canadian banking industry only as a Schedule III bank
D) widely held foreign banks can own 50 percent of a Canadian bank subsidiary
Answer: A
Diff: 1 Type: MC Page Ref: 252
Skill: Recall
Objective List: 11.3 Differentiate between chartered banks and near banks (i.e., trust and
mortgage loan companies, and credit unions and caisses populaires)
11.4 Comparison with the United States
The presence of so many commercial banks in the United States is most likely the result of
____.
A) consumers' strong desire for dealing with only local banks
B) adverse selection and moral hazard problems that give local banks a competitive advantage
over larger banks
C) prior regulations that restrict the ability of these financial institutions to open branches
D) consumers' preference for state banks
Answer: C
Diff: 1 Type: MC Page Ref: 253
Skill: Recall
Objective List: 11.4 Compare Canadian banking system with the U.S. system
The large number of banks in the United States is an indication of ____.
A) vigorous competition within the banking industry
B) lack of competition within the banking industry
C) regulations that restrict branch operations
D) consumer preference for local banks
Answer: B
Diff: 1 Type: MC Page Ref: 254
Skill: Recall
Objective List: 11.4 Compare Canadian banking system with the U.S. system