Modern Banking

How do modern banks facilitate payments?

• By issuing government bonds

• By providing physical cash to consumers

• Through electronic payment systems and managing checking accounts

• By printing new currency

Match the following

• Fractional Reserve Banking

• The amount that the bank can loan out.

• Excess Reserves

• Money deposited in a commercial bank in a checking account.

• Balance Sheet

• When banks hold a portion of deposits to cover potential withdrawals and then loans the rest of the money out.

• Required Reserves

• The percent that banks must hold by law.

• Demand Deposits

• A record of a bank’s assets, liabilities, and net worth.

A situation in which many depositors simultaneously decided to withdraw money from a bank?

• Bank Run

• Bank Boom

• Bank Hold

• Bank Holiday

What is the primary function of central banks in modern banking?

• To print money

• To regulate and oversee the banking system

• To provide loans to individuals

• To manage individual savings accounts

Which technology is most commonly used in modern banking for secure online transactions?

• Blockchain

• Magnetic stripe cards

• Paper checks

• Telegrams

What is the term for the interest rate at which banks lend to each other overnight?

• Prime rate

• Discount rate

• Federal funds rate

• Mortgage rate

Which of the following is a key feature of mobile banking?

• Access to physical bank branches

• 24/7 account access via smartphone

• Requirement of paper statements

• In-person teller services

What is the role of the International Monetary Fund (IMF) in global banking?

• To provide personal loans

• To offer insurance services

• To stabilize international exchange rates and provide financial assistance

• To manage individual retirement accounts

Which financial instrument is commonly used by banks to raise capital?

• Savings accounts

• Certificates of deposit

• Bonds

• Credit cards

What is the purpose of the Basel Accords in banking?

• To regulate the stock market

• To set international standards for bank capital requirements

• To manage currency exchange rates

• To provide guidelines for personal savings