FIA Financial Regulation & Supervision 2

Question 1

Which regulatory body oversees the safety and soundness of U.S. national banks and federal savings associations?

Accepted Answer

OCC

Answer

The Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises all national banks and federal savings associations.

Question 2

Under Basel III, what is the minimum Common Equity Tier 1 (CET1) capital ratio required for banks?

Accepted Answer

4.5%

Answer

Basel III requires a minimum CET1 ratio of 4.5% of risk-weighted assets, the highest quality form of regulatory capital.

Question 3

What is the primary purpose of the Financial Stability Oversight Council (FSOC)?

Accepted Answer

Identifying systemic risks to U.S. financial stability

Answer

FSOC was created by Dodd-Frank to identify risks to financial stability, promote market discipline, and respond to emerging threats to the financial system.

Question 4

A bank's leverage ratio under U.S. regulatory requirements is calculated as Tier 1 capital divided by:

Accepted Answer

Total average assets

Answer

The leverage ratio uses total average assets (not risk-weighted), providing a simpler, non-risk-based capital constraint.

Question 5

Which provision of the Dodd-Frank Act restricts proprietary trading by banks?

Accepted Answer

Volcker Rule

Answer

The Volcker Rule, Section 619 of Dodd-Frank, prohibits banks from engaging in short-term proprietary trading of certain financial instruments.

(FIA) Financial Information Associate Certification Practice Test

(FIA) Financial Information Associate Certification Practice Test

FIA Financial Regulation & Supervision 2