If a large number of borrowers default on their loans, the bank risks a solvency crisis.

Name: If a large number of borrowers default on their loans, the bank risks a solvency crisis.
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If a large number of borrowers default on their loans, it can lead to a significant reduction in the bank's assets and income, which can result in a solvency crisis where the bank may not have enough funds to meet its obligations.

If a Large Number of Borrowers Default on Their Loans