Anatomy and Physiology The Unity of Form
and Function 10th Edition by Kenneth S.
Saladin
What are marketable securities that banks hold called?
✓ Liquid assets
What percentage of the securities held by banks were mortgage-backed
securities in 2020?
✓ 55%
What is the largest category of bank assets?
✓ Loans
What are loans to businesses called?
✓ Commercial and industrial loans (C&I loans)
What type of loans increased from 31% of bank loans in 1973 to 54% in early
2020?
✓ Real estate loans
What is another term for bank capital?
✓ Shareholders' equity
What percentage of bank assets was the bank capital for the U.S. banking
system in 2020?
✓ 9.9%
What are reserves that banks hold over and above those that are required
called?
✓ Excess reserves
, What components make up a bank’s capital?
✓ Funds contributed by shareholders and accumulated retained profits
How does the value of a bank’s capital change?
✓ It changes with the value of the bank's assets and liabilities
What event caused many banks to see declines in the values of their loans and
securities?
✓ The financial crisis of 2007-2009
How is bank capital calculated?
✓ It is the difference between the value of a bank's assets and the value of its
liabilities.
What was the percentage of bank capital for the U.S. banking system in 2020?
✓ About 9.9% of bank assets
How does the value of a bank’s assets or liabilities affect its capital?
✓ As the value of a bank's assets or liabilities changes, so does the value of
the bank's capital.
What happened to the value of bank assets and capital during the financial crisis
of 2007–2009?
✓ The values of loans and securities owned by banks declined, resulting in
declines in the value of their capital.
What is liquidity risk for a bank?
✓ The possibility that a bank may not be able to meet its cash needs by selling
assets or raising funds at a reasonable cost.
How can banks minimize liquidity risk?
✓ By holding fewer loans and securities and more reserves.
What is a reverse repurchase agreement?
✓ A bank buys Treasury securities and agrees to sell them back at a later date.
and Function 10th Edition by Kenneth S.
Saladin
What are marketable securities that banks hold called?
✓ Liquid assets
What percentage of the securities held by banks were mortgage-backed
securities in 2020?
✓ 55%
What is the largest category of bank assets?
✓ Loans
What are loans to businesses called?
✓ Commercial and industrial loans (C&I loans)
What type of loans increased from 31% of bank loans in 1973 to 54% in early
2020?
✓ Real estate loans
What is another term for bank capital?
✓ Shareholders' equity
What percentage of bank assets was the bank capital for the U.S. banking
system in 2020?
✓ 9.9%
What are reserves that banks hold over and above those that are required
called?
✓ Excess reserves
, What components make up a bank’s capital?
✓ Funds contributed by shareholders and accumulated retained profits
How does the value of a bank’s capital change?
✓ It changes with the value of the bank's assets and liabilities
What event caused many banks to see declines in the values of their loans and
securities?
✓ The financial crisis of 2007-2009
How is bank capital calculated?
✓ It is the difference between the value of a bank's assets and the value of its
liabilities.
What was the percentage of bank capital for the U.S. banking system in 2020?
✓ About 9.9% of bank assets
How does the value of a bank’s assets or liabilities affect its capital?
✓ As the value of a bank's assets or liabilities changes, so does the value of
the bank's capital.
What happened to the value of bank assets and capital during the financial crisis
of 2007–2009?
✓ The values of loans and securities owned by banks declined, resulting in
declines in the value of their capital.
What is liquidity risk for a bank?
✓ The possibility that a bank may not be able to meet its cash needs by selling
assets or raising funds at a reasonable cost.
How can banks minimize liquidity risk?
✓ By holding fewer loans and securities and more reserves.
What is a reverse repurchase agreement?
✓ A bank buys Treasury securities and agrees to sell them back at a later date.
