Central Banking

Banks would probably start taking too many risks if

• their monetary policy is successful

• they could always be sure of being rescued by central bank

• there is a run on a commercial bank

• financial situation is stable

What is the potential consequence if banks could always be sure of being rescued by the central bank?

• They would take fewer risks

• They would take more risks

• They would maintain the same level of risk

• They would go bankrupt

The Central Bank sometimes lends money if

• a commercial bank is in trouble

• they print and distribute a lot of money

• there is a run on a commercial bank

• its monetary policy is successful

What is the role of the Central Bank when a commercial bank is in trouble?

• To print and distribute a lot of money

• To ensure the stability of the financial system

• To encourage the commercial bank to take more risks

• To maintain the same level of risk

Under what circumstances would a commercial bank be at risk of going bankrupt?

• When the central bank intervenes

• When there is a run on the bank

• When the financial situation is stable

• When the bank takes fewer risks

The functions of central banks are

• to control of the rate of inflation

• to maintain financial stability

• to supervise and regulate the banking system

• to lend money to commercial banks

a bank run

• банковский займ

• бегство из банка

• банковая паника

• банкротство

Tags

CCSS.RI.11-12.10

CCSS.RI.6.10

CCSS.RI.7.10

CCSS.RI.8.10

CCSS.RI.9-10.10

What is the primary function of the Central Bank in relation to commercial banks?

• To regulate the interest rates

• To ensure the stability of the financial system

• To encourage the commercial bank to take more risks

• To maintain the same level of risk

How would the behavior of commercial banks change if they were not always rescued by the central bank?

• They would take fewer risks

• They would take more risks

• They would maintain the same level of risk

• They would go bankrupt

What impact does the central bank's intervention have on the risk of a commercial bank going bankrupt?

• It reduces the risk

• It increases the risk

• It has no impact on the risk

• It stabilizes the risk