Based on Exhibit 4, which bank type most closely represents the traditional “3-6-3” model of banking (pay 3% on deposits, charge 6% on loans, golf by 3pm)?

A regulator compares Summit Trust and Harborview using Total Assets and concludes they are both healthy banks performing similar functions at different scales. Using the LC framework, what key insight does TA miss? (select all that apply)

Hard information (quantitative, verifiable data like credit scores and audited financial statements) benefits from economies of scale because it can be processed cheaply across millions of loans by algorithms, while soft information (qualitative, subjective data like borrower character) has scale diseconomies because it is difficult to transmit across organizational layers.

In the Diamond-Dybvig model, depositors face privately observed uncertainty about their future liquidity needs. The bank invests deposited funds in a long-term technology that is costly to liquidate early. What role does the bank serve for depositors in the good equilibrium?

Which of the following phrases gives the most precedential legal weight (ie. makes the case opinion the most powerful to the most courts) for a court of appeals ruling that is not argued before the Texas Supreme Court. 

The SRISK metric (expected capital shortfall during a systemic crisis) is useful for monitoring systemic risk at publicly traded banks but cannot capture risks at private institutions, which represents a significant blind spot.

Under the US dual banking system, a state-chartered bank that is NOT a member of the Federal Reserve System is primarily supervised by which agencies? (two answers)

A bank names its lending technologies by their primary source of information. Match the correct primary information source to each technology:(i) Fixed-asset lending uses ___; (ii) Relationship lending uses ___; (iii) Small business credit scoring uses ___

In Exhibit 2, Panel F shows that 92% of Pinnacle’s deposits were uninsured at the start of the period. Using the Diamond-Dybvig framework, why does this concentration of uninsured deposits make the observed deposit run more predictable?

Based on the patterns in Exhibits 2 and 3, which of the following regulatory reforms would most directly address the vulnerabilities that led to Pinnacle’s distress? (select all that apply)