A bank run can bankrupt a healthy bank because of all of the following EXCEPT which one?Bank will suffer a huge loss when it is forced to sell its non-cash assets in a short time period.Bank's cash in the vault is only a fraction of its total deposits.This bank has a lot of non-performing loans.On average bank's liabilities are always more liquid than its assets.

Answered: A bank run can bankrupt a healthy bank…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

A bank run can bankrupt a healthy bank because of all of the following EXCEPT which one?
Bank will suffer a huge loss when it is forced to sell its non-cash assets in a short time period.
Bank's cash in the vault is only a fraction of its total deposits.
This bank has a lot of non-performing loans.
On average bank's liabilities are always more liquid than its assets.

Expert Solution

Step 1

Banks are subject to a wide range of threats. Credit risk, liquidity risk, and interest rate risk are some examples. When a country's business and banking sectors experience a large number of defaults and such institutions and banks fail to meet commitments on time, a systemic banking crisis ensues.

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions