19-33 The regulatory practice of excessive capital forbearance is a method of reducing the short-run and long-run costs to deposit insurance funds.

Question

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The regulatory practice of excessive capital forbearance refers to regulators allowing banks to hold less capital than required, which can increase the risk of bank failure and ultimately increase costs to deposit insurance funds in the long-run. It does not reduce costs.

19-33 the Regulatory Practice of Excessive Capital Forbearance Is a Method