The Possibility That the Failure of One Bank Affects the Performance

question 186

Multiple Choice

The possibility that the failure of one bank affects the performance of other banks is called:

• A) moral hazard.
• B) a liquidity crisis.
• C) systemic risk.
• D) credit risk.

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Definitions:

Control Procedures

Activities and policies designed to ensure the accuracy, completeness, and reliability of a company's financial reporting.

Separating Responsibilities

A risk management strategy involving the division of tasks among different people or departments to prevent fraud and errors by ensuring no single individual has control over all aspects of any critical process.

Safeguarding Inventory

The process of implementing measures and controls to protect a company's inventory from loss, theft, or damage.

Co-conspirator

A co-conspirator is an individual who is involved in a conspiracy or illegal activity in partnership with one or more other persons.