Bank examiners have the authority to require banks to adjust their balance sheets by writing off loans that are deemed unlikely to be repaid. This is a common practice in the United States to ensure the accuracy and health of a bank's financial statements. However, the decision to write off a loan is based on the examiner's review and analysis of the loan, and not solely based on their personal judgment. The examiner will typically work with the bank to identify problem loans and agree on an appropriate course of action.

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In the U.S., Banks

Question 70

Multiple Choice

In the U.S., banks

A) may not be forced by bank examiner to adjust their balance sheets by writing off loans the examiner thinks will not be repaid.
B) may be forced by bank examiner to adjust their balance sheets by writing off loans the examiner thinks will not be repaid.
C) may be forced by bank examiner to adjust their balance sheets by writing off loans the examiner thinks will not be repaid only if the Fed and the FDIC examiners agree.
D) may be forced by bank examiner to adjust their balance sheets by writing off loans the examiner thinks will not be repaid only if the Fed and the Office of the Comptroller of the Currency examiners agree.
E) may be forced by bank examiner to adjust their balance sheets by paying off loans the examiner thinks will not be repaid.

Correct Answer: