Bank failures tend to occur most often during periods of:

Question

Quizplus · Accepted Answer

During recessions, many borrowers struggle to repay their loans and the overall lending activity slows down. This can lead to banks experiencing financial difficulties and ultimately failing. In contrast, during stock market run-ups, banks may become overvalued, but this does not necessarily lead to bank failures. High inflation can also impact banks by reducing their real returns, but this is not the primary factor leading to bank failures. Wars and civil unrest can create economic instability, but bank failures are not necessarily more common during these periods compared to other times of uncertainty.

Bank Failures Tend to Occur Most Often During Periods Of