7-53 General macroeconomic risks may affect all risks of a financial institution.

Question

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General macroeconomic risks can impact various aspects of a financial institution, such as credit, market, and liquidity risks. For example, a recession or economic downturn could lead to increased defaults on loans, lower asset values, and decreased liquidity in financial markets, which would all affect a financial institution's risks. Therefore, macroeconomic risks can have a broad impact on the overall risk profile of a financial institution.

7-53 General Macroeconomic Risks May Affect All Risks of a Financial