Which of the Following Is True Regarding Regulatory Rules for Standby

question 5

Multiple Choice

Which of the following is true regarding regulatory rules for standby credit letters issued by banks?

• A)They must list the standby credit letter as a liability on their balance sheet
• B)They do not have to list standby credit letters when assessing the risk exposure to a single credit customer
• C)They must apply the same credit standards for approving standby credit letters as direct loans
• D)They can apply lower capital standards to standby credit letters than loans
• E)None of the options is true

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