A) in a position where none of its creditors will get any of their money back
B) effectively bankrupt and depositors stand to lose money
C) effectively bankrupt but depositors can be paid off
D) effectively bankrupt but depositors and subordinated debt holders can be paid off
E) still a viable enterprise but with dramatically reduced capital
G) A) and C)
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A) increases as the quantity of services provided increases
B) decreases as the quantity of services provided increases
C) increases as the number of banks decrease
D) decreases as the number of banks increase
E) is unrelated to bank size or number
G) A) and E)
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A) Venture capital companies
B) Private financing companies
C) Financial markets
D) Public institutions
E) Banks
G) A) and E)
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A) it is of such economic importance that the government cannot allow it to fail
B) it is so large and profitable that failure is very unlikely
C) it is spread across so many countries, it cannot fail in any one country
D) it has enough money to pay off all its debts
E) all of the above
G) B) and D)
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A) ensure banks' capital expenditure is adequate
B) ensure deposit insurance is sufficient
C) ensure that banks have sufficient equity and subordinated debt to absorb losses
D) ensure that banks are regularly inspected by bank regulators
E) ensure that the Bank's share capital is not concentrated in the hands of just a few shareholders
G) A) and E)
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A) Central Banks tighten credit conditions too much
B) interest rate are too high
C) borrowers find it hard to access credit due to restricted supply by lenders
D) Central Banks dramatically increase the supply of money
E) several banks fail at once
G) C) and D)
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Correct Answer
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