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.