FDIC Technical Examination Exam Practice
Questions and Answers 100% Pass
What are the four purposes of Capital? - ANSWER✔✔-1. Absorb Losses
2. Promote Public Confidence
3. Restrict Excessive Asset Growth
4. Protect Depositors and the Deposit Insurance Fund
What are Basel III Capital Standards designed to do? - ANSWER✔✔-To
strengthen the quality and quantity of bank capital and promote a stronger
financial industry that is more resilient to economic stress
Who do Basel III standards apply to? - ANSWER✔✔-All FDIC insured
depository institutions
What is emphasized by Basel III standards as the predominant form of
bank capital? - ANSWER✔✔-Common Equity Tier 1 Capital
What is the most loss absorbing form of capital? - ANSWER✔✔-Common
Equity Tier 1 Capital
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 1/10
, Why is Common Equity Tier 1 Capital widely recognized as the most loss-
absorbing form of capital? - ANSWER✔✔-It is permanent and places
shareholders' funds at risk of loss in the event of insolvency
Where can you find the capital rules for all FDIC supervised institutions? -
ANSWER✔✔-Part 324 of of the FDIC rules and regulations
What are the four purposes of Part 324 of the FDIC rules and regulations? -
ANSWER✔✔--Defines capital elements
- Establishes risk-weighting guidelines for determining capital
requirements under the standardized and advanced approaches
-Sets PCA standards that prescribe supervisory action for institutions that
are not adequately capitalized
-Establishes requirements to maintain a capital conservation buffer that
affects capital distributions and discretionary payments
What are the components of regulatory capital? - ANSWER✔✔-- Common
equity tier 1 capital
- Additional tier 1 capital
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 2/10
Questions and Answers 100% Pass
What are the four purposes of Capital? - ANSWER✔✔-1. Absorb Losses
2. Promote Public Confidence
3. Restrict Excessive Asset Growth
4. Protect Depositors and the Deposit Insurance Fund
What are Basel III Capital Standards designed to do? - ANSWER✔✔-To
strengthen the quality and quantity of bank capital and promote a stronger
financial industry that is more resilient to economic stress
Who do Basel III standards apply to? - ANSWER✔✔-All FDIC insured
depository institutions
What is emphasized by Basel III standards as the predominant form of
bank capital? - ANSWER✔✔-Common Equity Tier 1 Capital
What is the most loss absorbing form of capital? - ANSWER✔✔-Common
Equity Tier 1 Capital
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 1/10
, Why is Common Equity Tier 1 Capital widely recognized as the most loss-
absorbing form of capital? - ANSWER✔✔-It is permanent and places
shareholders' funds at risk of loss in the event of insolvency
Where can you find the capital rules for all FDIC supervised institutions? -
ANSWER✔✔-Part 324 of of the FDIC rules and regulations
What are the four purposes of Part 324 of the FDIC rules and regulations? -
ANSWER✔✔--Defines capital elements
- Establishes risk-weighting guidelines for determining capital
requirements under the standardized and advanced approaches
-Sets PCA standards that prescribe supervisory action for institutions that
are not adequately capitalized
-Establishes requirements to maintain a capital conservation buffer that
affects capital distributions and discretionary payments
What are the components of regulatory capital? - ANSWER✔✔-- Common
equity tier 1 capital
- Additional tier 1 capital
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 2/10
