During a recession,which action are private banks likely to take?

Question

Quizplus · Accepted Answer

During a recession, private banks are likely to reduce lending in order to decrease their risk and preserve their own financial stability. Therefore, reducing lending would intensify the recession. It is unlikely that they would reduce interest rates or increase lending during a recession because it could be too risky for them. Additionally, reducing excess reserves would be unwise because it would decrease their ability to handle potential losses.

During a Recession,which Action Are Private Banks Likely to Take