Why Can Banks Operate with So Much More Leverage (So

question 6

Essay

Why can banks operate with so much more leverage (so much less equity capital) than ordinary businesses?

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Definitions:

Binding

The process of chemically linking two or more molecules together, often referring to the interaction between a protein and a ligand.

Substrate

The underlying substance or layer on which an organism lives, grows, or is attached, or a material upon which an enzyme acts.

Isomerases

Enzymes that catalyze the rearrangement of atoms within a molecule, often crucial in metabolic pathways.

Isomeric Form

Variants of a molecule that have the same molecular formula but differ in the arrangement of atoms within the molecule or in their spatial orientation.