When depositors lack of information about the quality of bank assets it can lead to ________.

Name: When depositors lack of information about the quality of bank assets it can lead to ________.
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When depositors lack information about the quality of bank assets, they may have doubts about the solvency of the bank which leads to a lack of confidence in the financial system. This can trigger bank panics, where many depositors withdraw their funds simultaneously, causing the bank to fail.

When Depositors Lack of Information About the Quality of Bank