Banking Operations Management Flashcards
7 cards from real CBP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Banking Operations Management flashcards as text
The Federal Deposit Insurance Corporation (FDIC) standard deposit insurance coverage limit per depositor, per insured bank, per ownership category is:
Answer: $250,000
The FDIC insures deposits up to $250,000 per depositor, per insured institution, per ownership category — a limit made permanent by the Dodd-Frank Act in 2010.
Which reconciliation process ensures that a bank's internal ledger balance for a customer account matches the physical cash and transactions recorded in branch systems?
Answer: Daily proof and settlement
Daily proof and settlement (also called 'balancing the books') reconciles all transactions processed during the day to ensure teller and system totals agree.
A bank's 'concentration risk' in its loan portfolio refers to:
Answer: Excessive exposure to a single borrower, industry, or geographic area
Concentration risk arises when a portfolio is overly exposed to correlated borrowers or sectors, meaning a single adverse event could cause outsized losses.
In wire transfer operations, which system is used for large-value, same-day domestic funds transfers between depository institutions through the Federal Reserve?
Answer: Fedwire Funds Service
Fedwire is the Federal Reserve's real-time gross settlement system that processes large-value, irrevocable same-day transfers between financial institutions.
Under Regulation E, a consumer must notify their bank of an unauthorized electronic fund transfer within how many days to limit liability to $50?
Answer: 2 business days
If a consumer reports the loss or theft of an access device within 2 business days, their liability is capped at $50; waiting longer increases potential liability to $500 or more.
Which capital adequacy ratio under Basel III represents the most stringent measure of a bank's core financial strength?
Answer: Common Equity Tier 1 (CET1) ratio
The CET1 ratio measures a bank's common equity — primarily retained earnings and common stock — divided by risk-weighted assets, representing the highest-quality, loss-absorbing capital.
A bank that processes payroll ACH files for corporate clients is acting in the capacity of:
Answer: Originating Depository Financial Institution (ODFI)
The ODFI initiates ACH entries on behalf of originators (such as employers), warranting that the entries comply with NACHA rules before transmitting to the ACH operator.