商业银行管理 ROSE 7e 课后答案 chapter02.docx

商业银行管理 ROSE 7e 课后答案 chapter02.docx

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商业银行管理ROSE7e课后答案chapter02

CHAPTER2

THEIMPACTOFGOVERNMENTPOLICYANDREGULATIONONBANKINGANDTHEFINANCIALSERVICESINDUSTRY

GoalofThisChapter:

Thischapterisdevotedtoastudyofthecomplexregulatoryenvironmentthatgovernmentsaroundtheworldhavecreatedforbanksandotherfinancialservicefirmsinanefforttosafeguardthepublic’ssavings,bringstabilitytothefinancialsystem,andpreventabuseoffinancialservicecustomers.

KeyTopicsPresentedinThisChapter

∙ThePrincipalReasonsforBankandNonbankFinancial-ServicesRegulation

∙MajorBankandNonbankRegulatorsandLaws

∙TheRiegle-NealandGramm-Leach-Bliley（GLB）Acts

∙KeyRegulatoryIssuesLeftUnresolved

∙TheCentralBankingSystem

∙OrganizationandStructureoftheFederalReserveSystemandLeadingCentralBanksofEuropeandAsia

∙IndustryImpactofCentralBankPolicyTools

ChapterOutline

I.Introduction:

NatureandImportanceofBankRegulation

II.BankingRegulation

A.ProsandConsofStrictRules

1.Toprotectthepublic'ssavings

2.Tocontrolthemoneysupply

3.Toensureadequatesupplyofloansandtoensurefairness

4.Tomaintainconfidenceinthesystem

5.Toavoidmonopolypowers

6.Toprovidesupportforgovernmentactivities

7.Tosupportspecialsectorsoftheeconomy

B.TheImpactofRegulation-TheArgumentsforStrictRulesversusLenientRules

III.MajorBankingLaws-WhereandWhentheRulesOriginated

A.Meetthe“Parents”:

TheLegislationThatCreatedToday’sBankRegulators

a.NationalCurrencyandBankActs（1863-64）

b.TheFederalReserveAct（1913）

c.TheBankingActof1933（Glass-Steagall）

d.EstablishingtheFDICunderGlass-Steagall

e.CriticismsoftheFDICandResponsesViaNewLegislation

f.RaisingtheFDICInsuranceLimit

B.InstillingSocialGracesandMorales-SocialResponsibilityLaws

C.LegislationAimedatAllowingInterstateBanking:

WhereCanthe“Kids”Play?

D.TheGramm-Leach-BlileyAct（1999）:

WhatAreAcceptableActivitiesforPlaytime?

E.TellingtheTruthandNotStretchingIt-TheSarbanes-OxleyAccountingStandardsAct（2002）

IV.The21stCenturyIssuesinanArrayofNewLaws,RegulationsandRegulatoryStrategies

A.TheFACTAct

B.Check21

C.NewBankruptcyRules

D.FederalDepositInsuranceReform

E.NewRegulatoryStrategiesinaNewCenturyandUnresolvedRegulatoryIssues

V.TheRegulationofNonbankFinancial-ServiceFirms

A.RegulatingThrift（Savings）Industry

1.CreditUnions

2.SavingsandLoansandSavingsBanks

3.MoneyMarketFunds

4.LifeandProperty/CasualtyInsuranceCompanies

5.FinanceCompanies

6.MutualFunds

7.SecurityBrokersandDealers

8.FinancialConglomerates

B.AreRegulationsReallyNecessaryintheFinancialServicesSector?

VI.TheCentralBankingSystem:

It’sImpactonBanksandtheDecisionsandPoliciesof

FinancialInstitutions

A.OrganizationalStructureoftheFederalReserveSystem

B.TheCentralBank'sPrincipalTask--MakingandImplementingMonetaryPolicy

1.TheOpenMarketPolicyToolofCentralBanking

2.OtherCentralBankPolicyTools

3.AFinalNoteonCentralBanking’sImpactofFinancialFirms

VII.SummaryoftheChapter

ConceptChecks

2-1.Whatkeyareasorfunctionsofabankorotherfinancialfirmareregulatedtoday?

Amongthemostimportantareasofbankingsubjecttoregulationaretheadequacyofabank'scapital,thequalityofitsloansandsecurityinvestments,itsliquidityposition,fund-raisingoptions,servicesoffered,anditsabilitytoexpandthroughbranchingandtheformationofholdingcompanies.

2-2.Whatarethereasonsforregulatingeachofthekeyareasorfunctionsnamedabove?

Theseareasareregulated,firstofall（andprimarily）,toprotectthesafetyofthedepositors'fundssothatthepublichassomeassurancethatitssavingsandtransactionsbalancesaresecure.Thus,bankfailureisviewedassomethingtobeminimized.Thereisalsoaconcernformaintainingcompetitionandforinsuringthatthepublichasreasonableandfairaccesstobankingservices,especiallycreditanddepositservices.

Notalloftheareaslistedaboveprobablyshouldberegulated.Minimizingtheriskofbankfailureservestosheltersomepoorlymanagedbanks.Thepublicwouldprobablybebetterservedinthelongrunbyallowinginefficientbankstofailratherthanproppingthemup.Moreover,regulationmayservetodistorttheallocationofresourcesinbanking,suchasbyrestrictingpricecompetitionthroughlegalinterest-rateceilingsandanti-branchinglawswhichleadstooverbuildingofphysicalfacilities.Theresultisawasteofscarceresources.

2-3.WhatistheprincipalroleoftheComptrollerofCurrency?

TheComptrolleroftheCurrencychartersandsupervisestheactivitiesofnationalbanksthroughitspolicy-settingandexaminations.

2-4.WhatistheprincipaljobperformedbytheFDIC?

TheFederalDepositInsuranceCorporation（FDIC）insuresthedepositsofbankcustomers,uptoatotalof$100,000peraccountowner,inbanksthatqualifyforacertificateoffederalinsurancecoverage.TheFDICisaprimaryfederalregulator（examiner）ofstate-chartered,non-memberbanks.Itisalsoresponsibleforliquidatingtheassetsofbanksdeclaredinsolventbytheirfederalorstatecharteringagency.

2-5.WhatkeyrolesdoestheFederalReserveSystemperforminthebankingandfinancialsystem?

TheFederalReserveSystemsupervisesandexaminestheactivitiesofstate-charteredbanksthatchoosetobecomemembersofitssystemandqualifyforFederalReservemembershipandregulatestheacquisitionsandactivitiesofbankholdingcompanies.However,theFed'sprincipalresponsibilityismonetarypolicy--thecontrolofmoneyandcreditgrowthinordertoachievebroadeconomicgoals.

2-6WhatistheGlass-SteagallActandWhyWasItImportantinbankinghistory?

TheGlass-SteagallAct,passedbytheU.S.Congressin1933,wasoneofthemostcomprehensivepiecesofbankinglegislationinAmericanhistory.ItcreatedtheFederalDepositInsuranceCorporationtoinsuresmaller-sizebankdeposits,imposedinterest-rateceilingsonbankdeposits,broadenedthebranchingpowersofnationalbankstoincludestatewidebranchingifstatebankspossessedsimilarpowers,andseparatedcommercialbankingfrominvestmentbanking,therebyremovingcommercialbanksfromunderwritingtheissueandsaleofcorporatestocksandbondsinthepublicmarket.

Therearemanypeoplewhofeelthatbanksshouldhavesomelimitationsontheirinvestmentbankingactivities.Theseanalystsfocusontwomainareas.First,theysuggestthatthisservicemaycauseproblemsforcustomersusingotherbankservices.Forexample,abankmayrequireacustomergettingaloantopurchasesecuritiesofacompanyitisunderwriting.Thispotentialconflictofinterestconcernssomeanalysts.Thesecondconcerndealswithwhetherthebankcangaineffectivecontroloveranindustrialorganization.Thiscouldmakethebanksubjecttoadditionalrisksormaygiveunaffiliatedindustrialorganizationsacompetitivedisadvantage.

Today,bankscanunderwritesecuritiesaspartoftheGramm-LeachBlileyAct（FinancialServicesModernizationAct）.However,congressbuiltinseveralprotectionstomakesurethatthebankdoesnottakeadvantageofcustomers.Inaddition,banksarepreventedfromaffiliatingwithindustrialfirmsunderthislaw.

2-7.Whydidthefederalinsurancesystemrunintoseriousproblemsinthe1980sand1990s?

Canthecurrentfederalinsurancesystembeimproved?

Inwhatways?

TheFDIC,whichinsuresU.S.bankdepositsupto$100,000,wasnotdesignedtodealwithsystem-widefailuresormassivenumbersoffailingbanks.Yet,the1980susheredinmorebankclosingsthaninanyperiodsincetheGreatDepressionofthe1930s,bringingtheFDICtothebrinkofbankruptcy.Also,theFDIC'spolicyofchargingthesameinsurancefeestoallbanksregardlessoftheirriskexposureencouragedmorebankstogambleandacceptsubstantialfailurerisk.TherecentFDICImprovementActlegislationhastargetedthislastarea,withmovementtowardarisk-basedinsurancescheduleandgreaterinsistenceonmaintainingadequatelong-termbankcapital.

2-8.HowdidtheEqualCreditOpportunityActandtheCommunityReinvestmentActaddressdiscrimination?

TheEqualCreditOpportunityActstatedthatindividualscouldnotbedeniedaloanbecauseoftheirage,sex,race,nationaloriginorreligiousaffiliationorbecausetheywererecipientsofpublicwelfare.TheCommunityReinvestmentActprohibitedbanksfromdiscriminatingagainstcustomersbasedontheneighborhoodinwhichtheylived.

2-9.HowdoestheFDICdealwithmostfailures?

Mostbankfailuresarehandledbygettinganotherbanktotakeoverthedepositsandcleanassetsofthefailedinstitution--aprocessknownaspurchaseandassumption.Thosethataresmallorinsuchbadshapethatnosuitablebidsarereceivedfromotherbanksareclosedandtheinsureddepositorsarepaidoff--adepositpayoffapproach.Largerfailuresmaysometimesbedealtwithbyopen-bankassistancewheretheFDICloansmoneytothetroubledbankandmayorderachangeinmanagementaswell.Largefailingmoney-centerbanksmayalsobetakenoverandoperatedas"bridgebanks"bytheFDICuntildisposedof.

2-10.WhatchangeshaveoccurredintheU.S.banks’authoritytocrossstatelines?

In1994theRiegle-NealInterstateBankingandEfficiencyActwaspassed.ThislawiscomplicatedbutallowsbankholdingcompanieswithadequatecapitaltoacquirebanksorbankholdingcompaniesanywhereinU.S.territory.Nobankholdingcompanycancontrolmorethan10%ofthedepositsatthenationallevelandmorethan30%ofthedepositsatthestatelevel.Bankholdingcompaniesareals