Reference no: EM131059858

1) Discuss the process of estimating the cost of deposit accounts.

2) How has the use of "hot money" affected bank's liquidity risk?

3) When calculating its cost of funds, should a bank use average or marginal costs? Why?

4) What is the purpose of having a correspondent bank relationship?

5) Briefly explain two models used to estimate the cost of equity?

6) Discuss the advantages and disadvantages of a bank holding less cash.

7) Discuss the major components of a bank's contingency funding plan.

8) What is a "bankers' bank"?

9) Why do banks prefer a lagged reserve accounting system to a contemporaneous reserve accounting system?

10) How can pledging requirements make bank assets less liquid?

11) Discuss the rationale behind risk-based capital requirements.

12) What are some of the weaknesses behind risk-based capital standards?

13) Why do smaller banks often have a more difficult time raising new capital compared to larger banks?

14) What is "moral hazard" and what is its impact on deposit insurance?

15) Discuss the "three-pillars" in Basel II.