CH 6 Flashcards
1
Q
Who were the members of the Act?
A
- Heads of major FED financial regulatory agencies
2
Q
What did the Act identify?
A
- Must hold additional capital
- require annual stress test
- Predicts degree of firms financial trouble in various economic scenarios
3
Q
What is Orderly liquidation authority
A
- Specifies steps by which FDIC can takeover, operate and liquidate bankrupt financial firm
4
Q
What is the Volker Rule?
A
- A section of the Dodd-Frank Act
5
Q
What does the Volker Rule prohibits?
A
- It prohibits proprietary trading by financial institutions taking deposits
- Limits risk taking by firms covered by the FDIC
6
Q
What is market makers? and who does it serves?
A
- Trade from their own inventory of securities
- Serves clients by being the counterpart to their trade (indirect trading)
7
Q
What are some negatives of the Volker Rule?
A
- Prevents Banks from doing important business functions
- Hurts competitiveness of US banks with foreign banks
- Only covers financial inst. receiving deposits
8
Q
What did the Dodd-Frank Act create?
A
- It created the Consumer Financial Protection Bureau
- It created a Financial Stability Oversight Council
9
Q
What is the goal for the Consumer Financial Protection Bureau
A
- Protect consumers from immoral banking practices
10
Q
Why do many in wall street see Dodd-Frank with criticisms?
A
- Regulatory over-reach
- Too many rules and regulations
- Will slow/reduce economic growth
