R8-Pt5-8

Question 1

What is considered the biggest change to financial regulation since the Great Depression of the 1930s?

Answer 1

The Dodd-Frank Wall Street Reform Act of 2010

Question 2

What is the goal of the Volcker Rule?

Answer 2

Banking Institutions maintain healthy capitalization ratios

Question 3

How does the Volcker Rule limit banking institutions?

Answer 3

Limits banking institutions from owning more than 3% of a hedge fund’s total ownership interest

Limits banking institutions from owning interests in hedge funds that exceed 3% of their Tier 1 Capital (Common Stock + Retained Earnings + non-redeemable; non-cumulative Preferred Stock)

Question 4

What does the Volcker Rule require banking institutions to disclose?

Answer 4

Relationships with hedge funds must be fully disclosed to regulators

Question 5

What are the 3 Independent Steps that can occur simultaneously in Money Laundering?

Answer 5

• Placement: Putting proceeds of illegal activites into the financial system
• Layering: Move Funds around to make it difficult to follow
• Integration: Movement of Money into Legitimate-Looking Transactions

Question 6

What is the $ Threshold for All Financial Institutions that will have to file a Report?

Answer 6

-Transactions of more then $10,000

Question 7

What is a Financial Institution?

Answer 7

• Not only Banks
• Credit Unions
• Pawn Brokers
• Casinos
• Brokerages
• Travel checks, Credit Cards companies

Question 8

BSA Regulations require Banks to maintain Records for?

Answer 8

• 5 Years at $3,000

- Identifying with: name, adrs, birth date, tax ID

Question 9

At a Minimum, a Bank’s Internal Compliance Program must be?

Answer 9

• Written, Approved by the Board of Directors, & Noted as such board minutes in meetings

Question 10

What is the Sherman Act?

Answer 10

• Prohibits Restraints of Trade & Monopolies

- Impact on interstate commerce: Fed. law applies

Question 11

What is Section 1 of the Sherman Act?

Answer 11

• Restraints of Trade:
• Rule of Reason Test: Balance Anti-competitive & Competitive Effects
• Per Se Violations: Inherently illegal & Without Legal Justification
• Horizontal Restraints: Agreements Between Competitors
• Vertical Restraints: Agreements by those at Different Marketing Levels

Question 12

What is Section 2 of the Sherman Act?

Answer 12

• Monopolies & Attempts to Monopolize

- Illegal Monopoly: Power & Power achieved unfairly

Question 13

Monoloply power exists when ?

Answer 13

• A Firm has sufficient market power to Control Prices or Exclude Competition
• Market Share of more 70%

Question 14

What is the Clayton Act?

Answer 14

• Aimed at Anti-competitive Behavior NOT covered by Sherman Act
• Stop activities in their Incipiency

Question 15

What is the Robinson- Patman Act?

Answer 15

• Amended & Strengthen Section 2 of the Clayton Act that prohibited Price Discrimination
• Only apply to price discrimination of commodities of like grade & quality