Why Do Banks Generally Prefer Lower Capital Requirements

question 106

Multiple Choice

Why do banks generally prefer lower capital requirements?

• A)To minimize the impact shareholders have on management decisions
• B)To increase the influence of bank regulators
• C)To increase a bank's return on equity
• D)To increase depositor protection
• E)To maximize operating leverage

---

Definitions:

Company's Reputation

The general public's perception of a company's credibility, reliability, and trustworthiness.

Corporate Litigation

Legal disputes involving companies, typically related to contracts, intellectual property, product liability, or other business activities.

Crisis

A significant threat to operations that can have long-term, negative consequences to the company or organization involved.

Triggering Event

An occurrence that initiates a particular action, process, or situation, often causing significant change or response.