Print Calculalor Available Fro Due Date: Points Possib Question 5 of 16 Map Sapl

Question

Print Calculalor Available Fro Due Date: Points Possib Question 5 of 16 Map Sapling Learning The following definitions regard the tools used to stabilize the Canadian financial system by preventing bank runs. Match each definition with its appropriate term. Each term is used only once Grade Categ 1. In 2012, the law stated that Canadian chartered banks did not have to hold a percentage of their deposits in Description: non-interest bearing accounts. However, many Canadian banks did. They did this, in pari, as a precaution against bank runs. Policies: table) You can che You can view give up on a You can kee until you ge You lose 5% answer in y attempt at t 2. In an attempt to combat excessive risk taking by banks, the Office of the Supenintendent of Financial Institutions (OSFI) requires banks to hold a percentage of the bank's equity (holding more assets than the value of the banks deposits) in common equity Tier 1 capital, including common shares issued by the institution. 3. This entity, which was created in 1967, provides deposit insurance, up to a maximum of $100,000, for each bank account held at a financial institution that is a member of this entity. This helps to prevent runs on the bank, because depositors know that the money in their accounts is safe (as long as the amount in the account is less than $100,000) O eTextbook O Help With 1 Canadian Deposit insurance Corporation (CD C)Capital Requirements Voluntary Reserve Ratio O Web Help8

Explanation / Answer

Correct answers:

1. Voluntary Reserve ratio (voluntary reserves held to protect against bank runs)

2. Capital Requirements (requirment for holding certain percentage as tier 1 capital)

3. Canadian Deposit Insurance Corporation (provides deposit insurance which helps prevent runs on the bank)

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