The Practice of Keeping High-Risk Assets on a Bank's Books

question 64

Multiple Choice

The practice of keeping high-risk assets on a bank's books while removing low-risk assets with the same capital requirement is know as

• A)competition in laxity.
• B)depositor supervision.
• C)regulatory arbitrage.
• D)a dual banking system.

---

Definitions:

Synesthesia

A crossing over of sensory perceptions. For example, a loud sound may be seen or a color may be felt.

Drug Dependency

A condition resulting from the chronic use of a drug where a person's body or mind feels a compulsory need to continue use despite potential harm.

Freebasing

A method of using drugs, especially cocaine, by converting them into a base so they can be smoked, leading to intense but short-lived effects.

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, serving as the main control center for the body's functions and responses.