The policy that requires regulator intervention when bank capital falls too low is _____, and it was introduced by the O prompt corrective action; Financial Services Modernization Act of 1999 O FDIC insurance; FDIC Improvement Act of 1991 O prompt corrective action; FDIC Improvement Act of 1991 O FDIC insurance; Financial Services Modernization Act of 1999

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A: The answer is provided below.

Q: do not earn

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Regulation of Commercial Banks

The main function of any commercial bank is accepting deposits and lending money to borrowers. Apart from these two activities, commercial banks provide a host of other services to their customers, like discounting bills of exchange, acting as a custodian of a customer's will, and so on. In the absence of a proper regulatory framework or proper regulations in place, the commercial banks would have ended up charging exorbitant or varied rates of interest or service charges on the funds loaned by them or the services performed by them.