Questions from Financial Markets

Q: What led to the establishment of FDIC insurance?

What led to the establishment of FDIC insurance?

Q: Describe the main provisions of the DIDMCA that relate to deregulation.

Describe the main provisions of the DIDMCA that relate to deregulation.

Q: Explain how the CAMELS ratings are used.

Explain how the CAMELS ratings are used.

Q: What is accomplished when a bank integrates its liability management with its

What is accomplished when a bank integrates its liability management with its asset management?

Q: How do banks use duration analysis?

How do banks use duration analysis?

Q: Why do loans that can be prepaid on a moment’s notice complicate

Why do loans that can be prepaid on a moment’s notice complicate the bank’s assessment of interest rate risk?

Q: Can a bank simultaneously maximize return and minimize credit risk? If

Can a bank simultaneously maximize return and minimize credit risk? If not, what can it do instead?

Q: Do all commercial borrowers receive the same interest rate on loans?

Do all commercial borrowers receive the same interest rate on loans?

Q: Why might a bank retain some excess earnings rather than distribute those

Why might a bank retain some excess earnings rather than distribute those funds as dividends?

Q: If a bank has more rate-sensitive liabilities than rate-

If a bank has more rate-sensitive liabilities than rate-sensitive assets, what will happen to its net interest margin during a period of rising interest rates? During a period of declining interest ra...