Which of the following refers to mandatory actions that have to be taken by regulators as a DI's capital ratio falls?

Question

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Prompt corrective action refers to mandatory actions that regulators have to take as a DI's capital ratio falls below certain thresholds. It involves different levels of regulatory intervention depending on the severity of the decline in capital ratio, ranging from increased monitoring and restrictions on activities to eventual receivership and liquidation. The other options - capital forbearance, risk-based deposit insurance, and too-big-to-fail - do not capture this specific requirement for regulatory action in response to declining capital ratios.

Which of the Following Refers to Mandatory Actions That Have