Banks can reduce their required capital levels by

Name: Banks can reduce their required capital levels by
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Required capital levels are calculated as a percentage of a bank's assets, with riskier assets requiring higher levels of capital. By reducing their loans and therefore their level of risky assets, banks can reduce their required capital levels. Increasing loans, increasing dividends, or obtaining more deposits would not have a direct impact on required capital levels.

Banks Can Reduce Their Required Capital Levels by