Why Do Regulators Prefer Higher Capital Requirements

question 62

Multiple Choice

Why do regulators prefer higher capital requirements?

• A)It justifies the existence of regulatory agencies.
• B)It protects the deposit insurance fund from serious losses.
• C)It enhances bank asset quality.
• D)It decreases bank profitability.
• E)It increases bank leverage.

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Definitions:

Plate Tectonics

A scientific theory explaining the motion of the Earth's lithosphere, which is divided into tectonic plates that move over the mantle, leading to many Earth's surface features.

Generally Accepted Fossils

Fossil specimens that are widely recognized and accepted by scientists as valid evidence of ancient life.

Stromatolites

Layered structures formed by the growth of microorganisms, often found in fossil form and important for understanding the Earth's early biosphere and atmospheric evolution.

Yeasts

A diverse group of unicellular fungi that are widely used in baking, brewing, and biotechnology for their ability to ferment sugars.