Burdensome regulations,along with inflation and rising interest rates,help to explain

Question

Quizplus · Accepted Answer

Burdensome regulations often create a disincentive for financial innovation and can stifle competition in the banking industry. In the 1960s and 1970s, this led to a rapid pace of financial innovations in banking as banks sought to find new ways to operate and compete in a highly regulated environment. This was also accompanied by rising inflation and interest rates, which made it more challenging for banks to profit from their traditional lending activities. Therefore, A is the best answer.

Option B is unlikely to be correct because low bank failures could have been attributed to several other factors, such as better risk management practices and more effective government interventions.

Burdensome Regulations,along with Inflation and Rising Interest Rates,help to Explain