The Following Are Protective Mechanisms That Have Been Developed by Regulators

question 63

Multiple Choice

The following are protective mechanisms that have been developed by regulators to promote the safety and soundness of the banking system EXCEPT

• A)encouraging banks to rely more on deposits rather than debt or capital as a cushion against failure.
• B)encouraging banks to limit lending to a single customer to no more than 10% of capital.
• C)the provision of deposit insurance.
• D)the periodic monitoring of banks.

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Definitions:

Naturalistic Fallacy

A logical error of equating what is natural with what is morally right or desirable.

Methodology

The system of methods and principles used in a particular discipline or field of study to gather and analyze data.

Evolutionary Psychology

A branch of psychology that studies how evolutionary principles help explain the structure and function of the human mind.

Cerebral Cortex

The outer layer of the brain that is responsible for complex cognitive processes, including thought, memory, awareness, and consciousness.