CFA Practice Question

CFA Practice Question

Banking industry includes:

I. Savings and loan associations.
II. Credit unions.
III. Commercial banks.
IV. Federal Reserve banks.
A. III only.
B. I, II, III only.
C. All of them.
Explanation: I, II and III are now under the jurisdiction of the Federal Reserve System. IV belongs to central bank system.

User Contributed Comments 3

User Comment
danlan IV is not part of bank industry but central bank system
visiblebob The Federal Reserve is collectively owned by the banks of the Federal Reserve system. They receive a dividend from that ownership and select board members for the branch banks. The Fed clears checks. It seems like stretch to disassociate the Federal Reserve banks from the banking industry when they are owned by the members of I, II, and III. Also, the Fed does turn a profit every year, it is not as though the Fed is giving away its services for free. That profit is then distributed through the above mentioned dividends and a payment to the U.S. government, essentially a tax (like all other businesses pay).
santibanez In the Eurozone the ECB+NCBs are considered as part of the banking system. It seems it's not the same in the US. Good to know before the exam!
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