The LVTS was put in place in order to eliminate the ________.
A) systemic risk
B) principal-agent problem
C) moral hazard problem
D) credit risk

Question

Quizplus · Accepted Answer

The LVTS (Large Value Transfer System) was put in place to eliminate systemic risk, which is the risk of the failure of one financial institution causing a domino effect of failures throughout the entire financial system. By providing a safe and efficient mechanism for large-value payments, the LVTS reduces the risk of such failures and enhances the stability of the financial system.

The LVTS Was Put in Place in Order to Eliminate