Multiple choice

1. The purpose of the international banking Act of 1978 was to:

a. return the competitive edge to U.S. banks.

b. return competitive equality between domestic and foreign banks

c. maintain fixed exchange rates

2. All of the following are techniques for reducing credit risk in international lending except:

a. foreign government guarantee of loans to private corporations

b. pooling risk through syndication with other banks

c. making floating-rate loans as opposed to fixed -rate loans

d. diversification

3. U.S. banks reduce their risk in foreign operations by:

a. seeking guarantee from borrowers

b. FDIC insurance

c. portfolio diversification

d. insurance thought the international monetary fund

4. Innovation around regulation followed by new regulation to offset the innovation is:

a. moral hazard

b. the innovation cycle

c. the regulatory dialectic

d. securitization