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Exam (elaborations)

FDIC Technical Examination Questions and Answers Fully Solved 100%

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  • FDIC Technical
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  • FDIC Technical

What items should be fully deducted from Tier 1 Capital? - ️️- Goodwill - Deferred tax assets that arise from net operating loss and tax credit carry-forwards - Other intangible assets (except for mortgage servicing assets) - Gains on sale of securitization exposures - Certain investments i...

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  • November 13, 2024
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  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • FDIC Technical
  • FDIC Technical
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FDIC Technical Examination
What items should be fully deducted from Tier 1 Capital? - ✔️✔️- Goodwill
- Deferred tax assets that arise from net operating loss and tax credit carry-forwards
- Other intangible assets (except for mortgage servicing assets)
- Gains on sale of securitization exposures
- Certain investments in another financial institution's capital instruments
- Unrealized gains or losses on certain cash flow hedges


What is the formula for calculating CET1 Capital? - ✔️✔️Common Stock + Surplus Net
of Treasury Stock + Retained Earnings + AOCI + (Regulatory Deductions/ Adjustments)
+ CET1 Non Controlling Minority Interest

What are the four purposes of Part 324 of the FDIC rules and regulations? - ✔️✔️-
Defines capital elements
- Establishes risk-weighting guidelines for determining capital requirements under the
standardized and advanced approaches
-Sets PCA standards that prescribe supervisory action for institutions that are not
adequately capitalized
-Establishes requirements to maintain a capital conservation buffer that affects capital
distributions and discretionary payments


What are Basel III Capital Standards designed to do? - ✔️✔️To strengthen the quality
and quantity of bank capital and promote a stronger financial industry that is more
resilient to economic stress

Who do Basel III standards apply to? - ✔️✔️All FDIC insured depository institutions

What is emphasized by Basel III standards as the predominant form of bank capital? -
✔️✔️Common Equity Tier 1 Capital

What is the most loss absorbing form of capital? - ✔️✔️Common Equity Tier 1 Capital

Why is Common Equity Tier 1 Capital widely recognized as the most loss-absorbing
form of capital? - ✔️✔️It is permanent and places shareholders' funds at risk of loss in
the event of insolvency

Where can you find the capital rules for all FDIC supervised institutions? - ✔️✔️Part
324 of of the FDIC rules and regulations

What are the four purposes of Capital? - ✔️✔️1. Absorb Losses
2. Promote Public Confidence

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