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Which of the Following Is False Concerning a Systematically Important

Question 14

Multiple Choice

Which of the following is false concerning a systematically important financial institution (SIF) ?


A) In the U.S. under the Dodd-Frank Act, the Financial Stability Oversight Council (FSOC) was established and is required to supervise and regulate non-bank SIFs.
B) SIFs do not include insurance companies, investment banks, or finance companies.
C) A systematically important financial institution can be a bank, insurance company or other financial institution whose failure could trigger a financial crisis.
D) SIFs may have systemic risk because of their size, interconnectedness, leverage, liquidity, risk and maturity mismatch, as well as lack of a substitute or lack of existing regulation.
E) SIFs are supervised more closely and may be potentially required to have higher safety margins, such as higher levels of capital to assets ratios and be subject to future limitations on their activities.

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