During the global financial crisis investment banks faced greater pressure as:

Question

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During the global financial crisis, investment banks faced greater pressure as a consequence of higher leverage and exposure to impaired assets. This led to many investment banks collapsing, such as Lehman Brothers, and also resulted in government bailouts of several big banks to avoid systemic risks. Option B and C are incorrect because increasing equity prices of financial institutions and the ability to provide illiquidity were not the root causes of the crisis for investment banks.

During the Global Financial Crisis Investment Banks Faced Greater Pressure