Quiz chapter 2 The Monetary Authorities Flashcards Preview

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Flashcards in Quiz chapter 2 The Monetary Authorities Deck (19):
1

1. In Australia, the Reserve Bank of Australia is the key monetary authority and is responsible for the conduct of monetary policy.
a. True
b. False

T

2

2. Financial contagion is the spillover effect of bank failures.
a. True
b. False

F

3

3. A primary objective of the Reserve Bank of Australia is to act as the lender of last resort.
a. True
b. False

T

4

4. The Reserve Bank of Australia can change the level of Australian depository institutions reserves.
a. True
b. False

T

5

5. The payments system is a mechanism for clearing checks.
a. True
b. False

F

6

6. The Reserve Bank of Australia is responsible for prudential supervision of financial institutions including banks, credit unions, building societies, and insurance and superannuation companies. a. True
b. False

F

7

7. Financial institutions hold exchange settlement account with central bank for transactions settlement. a. True
b. False

T

8

8. Rediscount facility involves financial institutions borrowing at a discount with the Reserve Bank of Australia.
a. True
b. False

F

9

9. Monetary policy can be described as the management of short-term interest rates in pursuit of domestic policy objectives. a. True
b. False

T

10

10. A key role of the Australian payments system is to clear check transactions between commercial banks.
a. True
b. False

F

11

11. Prudential supervision of financial institutions is about controlling risk management of financial institutions, maintain safeness of depositors' funds and provide stability in the financial system.
a. True
b. False

T

12

Exchange settlement accounts are account settlements between two commercial banks
a. True
b. False

F

13

13. Like any country, Hong Kong has a central bank which maintains stability and safety in the financial system.
a. True
b. False

F

14

14. Low-value payments are low-volume, low-value transactions made with instruments such as bank cheques and warrants, and cleared in real time transaction with each individual transaction.
a. True
b. False

F

15

15. A central bank regulates a nation's money supply and financial institutions in an attempt to provide the nation with a stable economic environment and an effective payments system.
a. True
b. False

T

16

16. The Reserve Bank Information and Transfer System settles high-value payments in real time between commercial banks. a. True
b. False

F

17

17. The 3-6-3 rule in banking means banks pay 3 per cent on deposits, charge 6 per cent on loans and play golf at 3 pm.
a. True
b. False

T

18

18. The Australian Stock Exchange settlement system for Australian equity trades is referred to as the Australian Securities and Investments Commission (ASIC).
a. True
b. False

F

19

19. Institutions supervised by the Australian Prudential Regulation Authority (APRA) such as banks, building societies and credit unions are eligible to hold an Exchange Settlement Account (ESA).
a. True
b. False

T