1) The ability to use the too big to fail policy was curtailed by the passage of the FDICIA. To use this action today, the FDIC must get approval of a two thirds majority of both the Board of Governors of the Federal Reserve and the directors of the FDIC and also the approval of the ________.
A) Secretary of the Treasury
B) Senate Finance Committee Chairperson
C) President of the United States
D) Governor of the state in which the failed bank is located
2) The directive of prompt corrective action means that
A) the FDIC will intervene earlier and more vigorously when a bank gets into trouble.
B) the banks must take actions quickly to resolve reserve disputes.
C) bank failures cannot occur.
D) there must be an immediate response to an increase in interest rates.
3) FDICIA ________ incentives for banks to hold capital and ________ incentives to take on excessive risk.
A) increased; decreased
B) increased; increased
C) decreased; decreased
D) decreased; increased