In: Finance
The likelihood of a bank run is reduced if:
Multiple Choice
A- the bank has sufficient equity capital
B- the government offers deposit insurance
C- the bank engages in maturity transformation
D- A and B
E- A, B, and C
When large number of bank depositors take out their money from bank to affect solvency of bank then it is known as bank run.
Here All the options are True. hence option E is correct
A- the bank has sufficient equity capital
B- the government offers deposit insurance
C- the bank engages in maturity transformation
All the options reduce bank run.