You have 30 minutes to answer the questions below. This is a multiple-choice exam. Circle one, and only one, of the possible answers listed below the questions.
1. Which is cheaper?
a. To save yourself $7bn from a $17bn bail out package
b. Bail out your banking system following the contagion from the collapse of banks in a neighbour's system
c. Withdraw your personal savings 10 days ahead of announcing a haircut for everyone else on deposits held in your domestic banks
2. If you are going to impose haircuts on depositors, to whom should it apply
b. Everyone except bond holders or investors into senior debt
c. Only the rich
d. The rich and the poor (but a bit less for the poor)
e. Anyone that doesn't have a vote in your elections
2. Which is the more responsible policy?
a. Uphold the sacrosanct principle of deposit insurance to ensure stability of the regional banking system irrespective of who's money is on deposit
b. Force the rich people to take a 10% haircut to protect your right flank in national elections this September
c. Make sure you book your summer holiday flights early to ensure you get the best deal
3. Who is equal before the law (including insurance laws)
a. Everyone working in your jurisdiction
b. Only to people you like
c. Doesn't matter as you have parliamentary immunity
4. Whom should you let into the Eurozone?
a. Countries that meet the Maastricht criteria
b. Countries that have friends like Greece that hold a gun to your head and block other accession candidates unless their buddies can join the club
c. Countries with nice beaches
5. If you suspect a country of money laundering, what should you do?
a. Act you think they are laundering money
b. Complain only after they have come to you to ask for a bail out
c. Check out their rates on deposit accounts
6. Which of these names do criminals commonly have?
g. None of the above
7. If a country is heavily dependent on a single source of income, which is the best industry for that country to have
f. Any industry as long as it has a generous lobby
8. What percentage of GDP does a country's dominant industry have to reach before you should worry about possible crises?
e. Kickbacks less than 5%
9. In a monetary union are the member countries...
a. Connected so that if one collapses it will adversely affect the others
b. Totally independent so that if one collapses the others will not be affected
c. Willing to let you open a bank account on short notice because things are not going well at home
10. Which costs more over the long-term?
a. To kill off uncertainty as convincingly and quickly as you can to restore confidence, so that credit rates fall aiding refinancing massive debt and encouraging companies to invest again for growth
b. Promote uncertainty, undermine your currency and risk your (and everyone else's) credit rating, so that refinancing costs rise, companies hang on to their cash and stimulate internal capital flight to the strongest countries
11. if you are struggling with heavy debt and illiquid banking sectors who should you woo
c. A wife or the girls at Oh La La
11. When you are in dire financial straits, to whom should you turn to for aid?
a. Allies with debts over 100% and massive deficits who don't really like you anyway
b. Allies with less than 10% debt/GDP ratios, lots of cash and well established business ties that are likely to grow in the future
12. Q. what does the word "guarantee" mean, as in "deposit insurance guarantee"
a. no matter what happens you will be alright
b. whatever happens you will be alright - unless we decide otherwise
Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more
bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more
Jason Corcoran in Moscow - Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his ... more