Historical evidence on bank failures in the U.S. has proven that small banks are more risky than large banks and, therefore, should have higher capital requirements than large banks.

Question

Quizplus · Accepted Answer

Historical evidence on bank failures in the U.S. does not conclusively prove that small banks are inherently more risky than large banks. The riskiness of a bank and the appropriate level of capital requirements depend on a variety of factors, including the bank's business model, management, market conditions, and regulatory environment, rather than just the size of the institution.

Historical Evidence on Bank Failures in the U