A bank failure occurs whenever ________.

Question

Quizplus · Accepted Answer

A bank failure occurs when a bank cannot satisfy its obligations to pay its depositors and have enough reserves to meet its reserve requirements. This can happen due to a variety of reasons such as bad loans, a decline in asset values, or a sudden withdrawal of deposits. A bank failure can have severe economic consequences and can lead to a chain reaction where other banks also fail due to a loss of confidence in the banking system.

A Bank Failure Occurs Whenever ________