ts Question 1 1 pts A dramatic increase in systemic risk of the financial system occurred in large part by a shift in the banking model from that of "originate and hold" to "originate to distribute". In attempts to avoid these risk exposures and generate improved return-risk tradeoffs, banks shifted to an underwriting model in which they originated or warehoused loans, and then quickly sold them. ourse mation True False Next D Question 2 1 pts The boom ("bubble") in the housing markets began building in 2001, particularly after the terrorist attacks of 9/11. The immediate response by regulators to the terrorist attacks was to create stability in the financial markets by providing liquidity to Fls. For example, the Federal Reserve raised the short-term money market rate that banks and other financial institutions pay in the Federal funds market. True False Next Previous Question 6 1 pts In the fall of 2008, the Federal Reserve implemented several measures to provide liquidity to financial markets that had frozen up as a result of the financial crisis. The liquidity facilities introduced by the Federal Reserve in response to the crisis created a large quantity of excess reserves at Dis. This has promoted the flow of credit to firms and households. True False Question 7 1 pts After 2003, discount window lending is limited only to depository institutions (Dis) with severe liquidity needs. The discount window rate, which is set below the fed funds rate, is charged on loans to depository institutions only under emergency or special liquidity situations. True False