Question

Which of the following is an agency that has responsibility for supervising and regulating the safety and soundness of banks?

		The Fed
		The Federal Deposit Insurance Corporation
		The Comptroller of the Currency Treasury Dept.
		All of the above share the responsibility

How did subprime mortgages differ from standard mortgages issued during the housing boom of the mid-2000s?

		They were less risky.
		They could not be securitized.
		They had low or no down payments.
		All of the above

Answer 1

1. Option D.

• All of the above share the responsibility of supervising and regulating the safety and soundness of banks.
• The comptroller of the currency treasury is one of the federal agencies that supervises and regulates all the operations of the banks to provide safer and efficient banking services.
• The federal reserve has the responsibility of examining the safety and soundness of the all the financial institutions by supervising their lending activities.
• The federal deposit insurance corporation guarantess safety and is designed to make the banking system safer. It allows customers to get their money back safely even after a bank failure.

2. Option C.

• The subprime mortgage crisis was a financial crisis that occurred after 2007 which led to the collapse of housing prices, household spending and business investments.
• In mid 2000s Interest rates were low on house payments which increased the people's affordability to buy homes or to get approved for loans. The people could easily make down payments on the house's through their savings.
• But the major difference between this housing boom of mid 2000s and the subprime mortgages was that like the standard mortgages of 2000s, they did not have any down payments or sometimes had low down payments.