CFA Practice Question
Banking industry includes:
II. Credit unions.
III. Commercial banks.
IV. Federal Reserve banks.
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! |