Question :
12.7 International Banking
1) The spectacular growth in international banking can : 1373748
12.7 International Banking
1) The spectacular growth in international banking can be explained by
A) the rapid growth in international trade.
B) the 1988 Basel Agreement.
C) the desire for U.S. banks to escape burdensome domestic regulations.
D) the creation of the World Trade Organization.
2) What country is given credit for the birth of the Eurodollar market?
A) The United States
B) England
C) The Soviet Union
D) Japan
3) Deposits in European banks denominated in dollars for the purpose of international transactions are known as
A) Eurodollars.
B) European Currency Units.
C) European Monetary Units.
D) International Monetary Units.
4) The main center of the Eurodollar market is
A) London.
B) Basel.
C) Paris.
D) New York.
5) Eurodollars are
A) dollar-dominated deposits held in banks outside the United States.
B) deposits held by U.S. banks in Europe.
C) deposits held by U.S. banks in foreign countries.
D) dollar-dominated deposits held in U.S. banks by Europeans.
6) Reasons for holding Eurodollars include
A) the fact that Eurodollar deposits are insured by the FDIC.
B) the fact that dollars are widely used to conduct international transactions.
C) the fact that minimum transaction sizes are very low, making Eurodollars an attractive savings instrument for consumers.
D) the fact that Eurodollar deposits are heavily regulated.
7) An advantage to American banks from operating foreign branches is that Eurodollar deposits in offshore branches are
A) not subject to reserve requirements.
B) insured by the FDIC.
C) subject to extensive regulatory supervision.
D) all demand deposits that pay no interest.
8) U.S. banks have most of their branches in
A) Latin America, the Far East, the Caribbean, and London.
B) Latin America, the Middle East, the Caribbean, and London.
C) Mexico, the Middle East, the Caribbean, and London.
D) South America, the Middle East, the Caribbean, and Canada.
9) A ________ is a subsidiary of a U.S. bank that is engaged primarily in international banking.
A) Edge Act corporation
B) Eurodollar agency
C) universal bank
D) McFadden corporation
10) ________ within the U.S. can make loans to foreigners but cannot make loans to domestic residents.
A) Edge Act corporations
B) International Banking Facilities
C) Universal banks
D) Euro banks
11) ________ of a foreign bank operates in the U.S. but cannot accept deposits from domestic residents.
A) An agency office
B) A universal corporation
C) A McFadden corporation
D) A Basel branch
12) If a foreign bank operates a subsidiary bank in the U.S., the subsidiary bank is
A) subject to the same regulations as a U.S. owned bank.
B) only subject to the regulations of the country in which the foreign bank is chartered.
C) restricted to making loans to only foreign citizens in the U.S.
D) restricted to accepting deposits from foreign citizens living in the U.S.
13) Since the passage of the International Banking Act of 1978, the competitive advantage enjoyed by foreign banks in the U.S. has been
A) reduced.
B) mildly expanded.
C) completely eliminated.
D) greatly expanded.
14) Discuss three ways in which U.S. banks can become involved in international banking.
