Awareness Flashcards
7 cards from real Banking Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Awareness flashcards as text
Which U.S. federal agency is primarily responsible for insuring deposits at commercial banks?
Answer: FDIC
The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per depositor, per insured bank.
What is the primary purpose of the Bank Secrecy Act (BSA)?
Answer: Prevent money laundering and financial crimes
The BSA requires financial institutions to assist government agencies in detecting and preventing money laundering.
The Community Reinvestment Act (CRA) was designed to prevent which practice?
Answer: Redlining
The CRA was enacted to prohibit redlining, where banks refused to lend in minority or low-income neighborhoods.
What is 'Know Your Customer' (KYC) in banking?
Answer: A process to verify the identity and assess risks of customers
KYC is a compliance process that banks use to verify customer identities and evaluate potential risks of illegal activity.
Which financial statement shows a bank's assets, liabilities, and equity at a specific point in time?
Answer: Balance sheet
The balance sheet (also called statement of financial position) captures a snapshot of what a bank owns and owes on a given date.
What does the term 'net interest margin' (NIM) measure for a bank?
Answer: The profitability of a bank's lending relative to interest paid on deposits
NIM measures how much a bank earns on its loans and investments compared to what it pays on deposits and borrowings.
Under the Dodd-Frank Act, which council monitors systemic risk to the U.S. financial system?
Answer: Financial Stability Oversight Council (FSOC)
The FSOC was created by Dodd-Frank to identify risks to U.S. financial stability and promote market discipline.