A bank failure is less likely to occur when ________.

Name: A bank failure is less likely to occur when ________.
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If a bank has more bank capital, it has a larger cushion to absorb potential losses, making it less likely to fail. Holding fewer government securities or excess reserves would not necessarily make a bank more or less likely to fail. Suffering large deposit outflows could potentially lead to a bank failure if it exhausts the bank's liquidity and capital.

A Bank Failure Is Less Likely to Occur When ________