Regulatory forbearance refers to a policy of

Question

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Regulatory forbearance refers to a policy where the regulatory authority allows insolvent banks to continue to operate despite being unable to meet their financial obligations. This is done in order to provide the banks with time to recover and avoid a sudden collapse which could have a negative impact on the economy. By allowing the bank to continue operating, the regulatory authority hopes to prevent a panic in the financial markets, which could trigger a wider financial crisis.

Regulatory Forbearance Refers to a Policy of