WorksheetsTopic 7 Part 2
Total questions: 10
Worksheet time: 10mins
What is foreign debt crisis?
A foreign company fails to repay the debt
Banking crisis caused by a political turmoil
A government is unwilling to repay the loan
Debt crisis between banks in a banking system
What is the key difference between bank crisis and financial crisis?
The types of financial institution involved
The type of loans defaulted
The number of countries affected
The severity of bank runs
What triggers banking problems?
Reduction in bank customers
Increase in bank capital
Reduction in bank asset values
Increase in bank stability
The following are the criteria of a systemic banking crisis EXCEPT
The liquidation of banks' assets by the regulator
Increased probability of bank runs
Massive policy intervention by the government
Increased bank capital position
Government injects capital into banks by purchasing bank shares is the example of?
Significant asset purchases
Significant bank nasionalisation
Extensive liquidity support
Bank restructuring
What is the meaning of microeconomic factors that lead to a crisis?
Factors that come from the market
Factors that come from bank specific problems
Factors that come from microcredit problems
Factors that come from a banking system structure
Which from the following best describes principal-agent incentive problem in bank management?
Bank managers increase bank safety according to Board of Director instructions
Bank managers take additional risks to gain more rewards on the loans disbursed
Bank managers adhere to the shareholder instructions to pay dividends
Bank managers keen to diversify their loan portfolio
Unnecessary number of staff is a problem related to?
Macroeconomic reason
Microeconomic reason
Stability reason
System-related reason
How does competition increase the risk of financial/banking crisis?
Lack of incentive for incumbent banks to operate efficiently
The improvement on foreign bank products and services
Lack of cooperation between local banks
Lack of supervision by the regulator
What is the impact of crises on an economy?
Reduction in banking risk
Reduction in national output
Reduction in bank managers' incentives
Reduction in regulatory involvement in regulating banks
