One Way for Bank Regulators to Assure Depositors That a Bank

question 2

Multiple Choice

One way for bank regulators to assure depositors that a bank is not taking on too much risk is to require the bank to

• A) diversify its loan portfolio.
• B) reduce its equity capital.
• C) reduce the size of its loan portfolio.
• D) do both A and B of the above.
• E) do both B and C of the above.

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Definitions:

Federal Government

The national government of a country, responsible for governing the nation as a whole.

Contract Clause

is a component of the U.S. Constitution that prevents states from enacting laws that retroactively impair contract rights.

Constitution

Core tenets or long-standing norms that guide the governance of a state or similar entity.

State Governments

The governing bodies of individual states within a federation, responsible for legislating and implementing state-specific laws and regulations.