22-22 More FIs fail due to credit risk exposure than exposure to either interest rate risk or foreign exchange risk.

Question

Quizplus · Accepted Answer

This statement is true. Credit risk, which refers to the risk of default by borrowers, is generally considered the most significant risk faced by financial institutions (FIs). Therefore, it is not surprising that more FIs fail due to credit risk exposure than exposure to either interest rate risk or foreign exchange risk. However, it should be noted that interest rate and foreign exchange risks do present significant challenges to FIs, and effective risk management is critical to the success of these institutions.

22-22 More FIs Fail Due to Credit Risk Exposure Than