21-84 Which action of the holding company to help its securities affiliate can damage the financial health of its banking subsidiary?

Question

Quizplus · Accepted Answer

Upstreaming funds from the bank subsidiary and then downstreaming it to the securities affiliate can damage the financial health of the banking subsidiary by reducing its liquidity and capital reserves. This can leave the bank vulnerable to financial instability, which could hurt its ability to serve its customers and maintain a sound financial position. Downstreaming funds from the subsidiary and then upstreaming it to the securities affiliate (choice A) could also have a similar negative impact on the bank's financial health. Choices B, C, and E are not directly related to actions that could harm the financial health of the bank.

21-84 Which Action of the Holding Company to Help Its