Financial institutions that cut back on their lending are engaged in ________.

Question

Quizplus · Accepted Answer

Deleveraging refers to the process of reducing leverage or debt levels. When financial institutions cut back on their lending, it means that they are reducing the amount of debt that they are putting into the market, which is a form of deleveraging. This may be done for various reasons, including risk management, regulatory requirements, or financial stability concerns. Liability management refers to the management of a firm's liabilities or debts, and is not directly related to reducing lending. Financial innovation and torsion control are not relevant to the given context.

Financial Institutions That Cut Back on Their Lending Are Engaged