Unit 2

The terms bank regulation and supervision are often used interchangeably. However, supervision usually refers to...

• Rules imposed by authorities

• When authorities have the power to

  intervene and take corrective actions

• Prudential regulation

• Self-regulation

The advocates of self-regulation believe that sometimes...

• the market can discipline banks as customers can go elsewhere

• strict regulation should be avoided at all times

• banks are regulators

• customers are supervisors

Before the 1990s, banks were primarily supervised by...

• The customers

• The government

• The central bank

• Other banks

The Financial

Services Authority (FSA) was one of the first...

• Central banks

• Unified regulators

• US regulators

• Hedge funds

Which of the following is not a weakness of external regulation...

• Inflexible

• Expensive to administer & enforce

• Inhibits desirable behaviour

• Uses very simple rules

Enforced self-regulation is usually accomplished with the adoption of a...

• Standardized regulation process

• Clear management organization

• Code of ethics

• Sustainability strategy

A single regulator can become...

• Internationally powerful

• Too small and flexible

• Too powerful and excessively bureaucratic

• Too expensive to maintain

The twin peaks regulatory regimes include...

• Internal supervision and external regulation.

• External and self-regulation.

• Principles and rules.

• Prudential regulation and code of business.

The twin peaks regulation is facilitated in the UK with the...

• PRA and FCA.

• PPA and BoE.

• ENU and UoE

• FBI and CIA.

The Prudential Regulation Authority is primarily concerned with...

• Transparency.

• Conduct of business.

• Capital and liquidity requirements.

• Credit control.