Early in 2008, mark-to-market accounting provisions caused the banks to:

Question

Quizplus · Accepted Answer

Mark-to-market accounting provisions required the banks to revalue their portfolio downwards, which resulted in a decrease in their assets' value. As a result, the banks' capital adequacy ratio declined, and they became vulnerable to falling below the regulatory capital requirements. This restricted their ability to extend new loans, and the banks had to focus on maintaining their current capital levels. Therefore, all of the given statements are correct.

Early in 2008, Mark-To-Market Accounting Provisions Caused the Banks To