Which of the Following Is Not a Reason Why Interbank

question 11

Multiple Choice

Which of the following is not a reason why interbank lending dried up during the financial crisis of 2007-2009?

• A)Banks preferred to hold on to their liquid assets in case their own need for them increased.
• B)Banks grew increasingly concerned about the ability of their trading partners to repay the loans.
• C)The increased cost of loans.
• D)The Fed grew increasingly wary of making liquidity available to banks.

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Definitions:

Effective

Capable of producing the intended or desired result.

Capital Contribution

Money, property, or other assets contributed to a company or partnership by its owners or partners to support its operations.

Limited Partner

An investor in a limited partnership who is not involved in daily business operations and whose liability is limited to the amount they invested in the partnership.

General Partners

Individuals who participate in the management of a partnership and have unlimited liability for its debts.