Losses on defaulted loans that were anticipated decrease the current earnings of the bank.
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Q2: Bank equity includes surplus and undivided profits
Q3: Normally, the market value of equity exceeds
Q4: Market value accounting would make the value
Q5: Large banks tend to use more long-term
Q6: Subordinated notes and debentures issued by banks
Q8: The provision for loan losses account can
Q9: Today, banks with assets more than $500
Q10: For failed banks, long-term debt serves the
Q11: Capital requirements do NOT reduce the moral-hazard
Q12: Because deposit insurance may create incentives for
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