Concern about bank solvency has been used to justify product segmentation on the grounds of
A)safety and soundness issues.
B)economy of scale and scope issues.
C)conflict of interest issues.
D)deposit insurance issues.

Question

Quizplus · Accepted Answer

Concerns about bank solvency relate to the ability of a bank to meet its financial obligations. Segmentation may be used to address these concerns by separating higher-risk products or customers from the rest of the bank's operations, thereby reducing the impact of potential losses on the overall financial health of the institution. This approach is consistent with safety and soundness considerations, which are a key concern for bank regulators and policymakers.

Concern About Bank Solvency Has Been Used to Justify Product