Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
35 Cards in this Set
- Front
- Back
|
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects the funds depositors place in banks and savings associations. |
that protects the funds depositors place in banks and savings associations. |
|
|
FDIC insurance is backed by the |
full faith and credit of the United States government |
|
|
Since the FDIC was established in 1933 depositor have lost? |
no depositor has lost a penny of FDIC-insured funds |
|
|
FDIC insurance covers all deposit accounts, including: |
Checking accounts Savings accounts Money market deposit accounts Certificates of deposit |
|
|
FDIC insurance does not cover other financial products and services that banks may offer, such as |
stocks, bonds, mutual funds, life insurance policies, annuities or securities. |
|
|
The standard insurance amount is |
$250,000 per depositor, per insured bank, for each account ownership category. |
|
|
A deficit in a country's balance of payments tends to produce |
a fall in the exchange value of that country's currency |
|
|
he Federal Reserve works in conjunction with other federal and state authorities to ensure |
that financial institutions safely manage their operations and provide fair and equitable services to consumers. |
|
|
Bank examiners also gather information on trends in the financial industry, which helps |
the Federal Reserve System meet its other responsibilities, including determining monetary policy. |
|
|
a bank’s primary source of income. |
Borrowers are charged interest on the loan – |
|
|
Banks also make money from charging fees for other financial services, |
such as debit cards, automated teller machine (ATM) usage and overdrafts on checking accounts |
|
|
To measure the safety and soundness of a bank, an examiner performs an |
on-site examination review of the bank's performance based on its management and financial condition, and its compliance with regulations. |
|
|
The examiner uses the CAMELS rating system to help measure the safety and soundness of a bank. Each letter stands for one of the six components of a bank’s condition: |
capital adequacy, asset quality, management, earnings, liquidity and sensitivity to market risk. |
|
|
When a bank reviews a loan application, it uses the "5-Cs" to assess the quality of the applicant. The 5-Cs stand for: |
Capacity - measures the borrower’s ability to pay, including borrower’s payment source and amount of income relative to debt. Collateral - what are the bank’s options if the loan is not paid? What asset can be turned over to the bank, what is its market value, and can it be sold easily? A valuable asset might be a house or a car. Condition - this refers to the borrower’s circumstances. For example, if a furniture storeowner is asking for a loan, the banker would be interested in how many chairs and sofas the store is expected to sell in the area over the next five years. Capital - the applicant’s assets (house, car, savings) minus liabilities (home mortgage, credit card balance) represent capital. If liabilities outweigh assets, the borrower might have difficulty repaying a loan if his regular source of income unexpectedly decreases. Character - measures the borrower’s willingness to pay, including the borrower’s payment history, credit report and information from other lenders. |
|
|
Several federal and state authorities regulate banks along with the Federal Reserve. |
The Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS) and the banking departments of various states also regulate financial institutions. |
|
|
The OCC charters, regulates and supervises |
nationally chartered banks |
|
|
The FDIC, the Federal Reserve and state banking authorities regulate |
state-chartered bank and Bank holding companies and financial services holding companies, which own or have controlling interest in one or more banks |
|
|
The OTS examines federal and many state-chartered thrift institutions, which include savings banks and savings and loan associations. |
savings banks and savings and loan associations |
|
|
The main functions of Money are : |
It is a medium of exchange. It gives purchasing power to consumer to pay for goods and services. It is a unit of account.It is a unit measure of value. It is a standard of deferred payment. |
|
|
There are four different types of money as mention below |
Commodity Money Fiat Money Fiduciary Money Commercial Bank Money |
|
|
Commodity Money |
The value of this kind of money comes from the value of resource used for the purpose. It is only limited by the scarcity of the resources. |
|
|
Fiat Money today's money is based on this system |
the kind of money which don’t have any intrinsic value and it can’t converted into valuable resource. The value is determined by government order which makes it a legal instrument for all transaction purposes. And needs to be controlled as it may affect entire economy of a country if it is misused. |
|
|
Fiduciary Money Today’s monetary system is highly fiduciary. |
A bank assures the customers to pay in different types of money and when the customer can sell the promise or transfer it to somebody else, it is called the fiduciary money. is generally paid in gold, silver or paper money. |
|
|
Commercial Bank Money or Demand deposits |
claims against financial institutions that can be used for the purchase of goods and services. an account from which funds can be withdrawn at any time by cheque or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held immediately upon demand (or ‘at call’). withdrawals can be performed in person, via cheques or bank drafts, using automatic teller machines (ATMs), or through online banking. |
|
|
The Federal Reserve is the central bank system of the United States that includes the. |
Board of Governors in Washington, D.C., and 12 independent regional Reserve banks. |
|
|
This decentralized structure ensures that the economic conditions of all areas of the country are taken into account in the making of monetary policy. |
The Board of Governors |
|
|
Federal Reserves Districts |
Atlanta | Boston | Chicago | Cleveland | Dallas | Kansas City | Minneapolis | New York | Philadelphia | Richmond | San Francisco | St. Louis |
|
|
What are the 5 key functions of the Federal Reserves districts |
Conductingthe nation’smonetarypolicyHelpingmaintain thestability ofthe financialsystem Supervisingand regulating financialinstitutionsFosteringpayment andsettlementsystem safetyand effciency Promotingconsumerprotection andcommunitydevelopment |
|
|
The framers of the Federal Reserve Act purposely rejected the conceptof a single central bank. Instead, they provided for a central banking“system” with three salient features: |
: (1) a central governing Board, (2) a decentralized operating structure of 12 Reserve Banks, and (3) a combination of public and private characteristics. |
|
|
oversees the Federal Reserve Systemand its entities. |
CONGRESS |
|
|
is an independent agency of thefederal government. |
BOARD OF GOVERNORS |
|
|
are the operating arms of theFederal Reserve System and aresupervised by the Board of Governors |
FEDERAL RESERVE BANKS |
|
|
consists of the members of the Board ofGovernors and Reserve Bank presidents.The Chair of the Board is theFOMC Chair. |
FEDERAL OPEN MARKETCOMMITTEE |
|
|
Money Markets |
commercial banks and other businesses adjust their liquidity position by borrowing, lending, or investing for short periods of time |
|
|
Treasury bills |
direct obligations of the U.S. government and thus are considered to have no default risk |
