Banks establish long-term commitments as a way of managing credit risk.

Name: Banks establish long-term commitments as a way of managing credit risk.
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Banks establish long-term commitments with clients, such as long-term loans or lines of credit, as part of their credit risk management strategy. This allows banks to assess and monitor the creditworthiness of clients over time, reducing the likelihood of default and managing their exposure to credit risk more effectively.

Banks Establish Long-Term Commitments as a Way of Managing Credit