The Major Reasons for the Shift in the Composition of Bank

question 75

Multiple Choice

The major reasons for the shift in the composition of bank lending commitments from the retail market to the commercial market are the:

• A)introduction of capital adequacy regulations in 1989
• B)number of non-bank depository institutions that gained banking licences in the early 1990s
• C)fact that commercial loans paid higher returns than housing loans
• D)None of the listed options are correct as the shift was from commercial loans to housing loans.

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Definitions:

Repudiated

The act of rejecting or disowning a contractual obligation or agreement, often leading to termination of the contract.

Merchant

A business or individual engaged in the trade of goods, services, or commodities for profit.

Credit

The provision of resources (like money) by one party to another, where the second party agrees to repay the first party at a later date, usually with interest.

Liable

Legally responsible or obligated, often in the context of paying compensation for harm or damage.