Besides reducing credit risks,an FI has an incentive to sell loans it originates for all of the following reasons EXCEPT to

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Selling loans does not decrease core deposits; it reduces loan assets on the balance sheet. The other three options are valid reasons for FIs to sell loans they originate. Geographical diversification helps spread risks across regions, lower reserve requirements reduce the amount of capital that FIs must set aside to cover potential losses, and lower capital requirements free up capital for investing in other ventures.

Besides Reducing Credit Risks,an FI Has an Incentive to Sell