When FIs form off-balance sheet subsidiaries to remove assets from their balance sheet, the subsidiary activities
A)are regulated as though they are part of the parent institution.
B)occur beyond the reach of existing state and federal monitoring and regulation.
C)are monitored and regulated by the Securities and Exchange Commission (SEC).
D)are reported to the National Association of Securities Dealers (NASD).
E)must follow the Bank for International Settlements (BIS) capital adequacy standards.

Question

Quizplus · Accepted Answer

Off-balance sheet subsidiaries often operate in a way that places them beyond the direct reach of existing state and federal monitoring and regulation, allowing financial institutions to engage in activities with less oversight.

When FIs Form Off-Balance Sheet Subsidiaries to Remove Assets from Their