20-11 If the value of equity is less than zero on a mark-to-market accounting basis,liquidation of the FI may result in losses to the depositors or creditors.

Question

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If the value of equity is negative on a mark-to-market basis, it means the FI's assets are worth less than its liabilities, which indicates insolvency. In the event of liquidation, the depositors or creditors may not be able to recover their funds fully, resulting in losses.

20-11 If the Value of Equity Is Less Than Zero