The following are protective mechanisms that have been developed by regulators to promote the safety and soundness of the banking system EXCEPT

Question

Quizplus · Accepted Answer

Encouraging banks to rely more on deposits rather than debt or capital as a cushion against failure is not a recognized protective mechanism developed by regulators to promote the safety and soundness of the banking system. The other choices; B) encouraging banks to limit lending to a single customer to no more than 10% of capital, C) the provision of deposit insurance, D) the periodic monitoring of banks, and E) encouraging banks to produce timely accounting statements and reports are all recognized protective mechanisms developed by regulators to promote the safety and soundness of the banking system.

The Following Are Protective Mechanisms That Have Been Developed by Regulators