Sometimes banks received criticism because domestic governments take special political steps to reduce the probability that foreign borrowers will default or repudiate their debt contracts, an occurrence that could cause financial harm to the domestic banks.

Question

Quizplus · Accepted Answer

This statement is true. It is not uncommon for governments to take measures to protect their domestic banks from the financial impact of foreign borrowers defaulting on their debt.

Sometimes Banks Received Criticism Because Domestic Governments Take Special Political