11-4 Sustained credit quality problems can drain an FI's capital and net worth.

Name: 11-4 Sustained credit quality problems can drain an FI's capital and net worth.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Sustained credit quality problems, such as a high level of loan defaults, can lead to losses for a financial institution and erode its capital and net worth over time. This can ultimately make the institution financially unstable and even lead to insolvency if not addressed appropriately.

11-4 Sustained Credit Quality Problems Can Drain an FI's Capital