Sometimes Regulators Refrain from Putting Insolvent Banks Out of Business

question 99

Multiple Choice

Sometimes regulators refrain from putting insolvent banks out of business. This is also known as ________.

• A) a decrease in deposit insurance
• B) a decrease in interest rates to fight the inflation problem
• C) regulatory forbearance
• D) increased regulation that prohibited banks from making risky loans

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Definitions:

Maximum Amount

The highest possible quantity or value that can be achieved or allowed, often within a specific context or regulation.

Deficit Balance

A financial situation where liabilities exceed assets or expenses exceed income, leading to a negative balance.

Capital Account

The capital account in financial accounting represents where adjustments in assets and liabilities are recorded, correlating to transactions involving investments or loans.

Liquidating Partnership

A process where a partnership ends its operations, sells off its assets, and pays its liabilities, distributing the remaining assets to the partners based on their share in the partnership.