Currently, Federal Standards Do Not Allow Investment Banks to Convert

question 81

True/False

Currently, federal standards do not allow investment banks to convert to a bank holding company structure.

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Definitions:

Required Reserves

The dollar amount of reserves a bank is obligated by regulation to hold as cash in the bank’s vault or on account at the Fed.

Checkable Deposits

Bank accounts on which checks can be drawn. These include checking accounts and demand deposits that allow owners to write checks against their account balances.

Excess Reserves

Funds that banks hold over and above the regulatory requirement, which can influence the bank's ability to lend and the overall money supply.

Required Reserve Ratio

The fraction of deposits that banks are required to hold in reserve and not lend out, set by the central bank.