Bank regulations serve as guidelines for sound operating policies. While they cannot completely prevent bank failures or eliminate economic risk for banks, they can help to mitigate these risks by promoting responsible and ethical behavior in the banking industry. However, they cannot guarantee that bankers will always make sound management decisions or act in an ethical manner.

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Bank Regulations

Question 22

Multiple Choice

Bank regulations:

A) can prevent bank failures.
B) can eliminate economic risk for banks.
C) serve as guidelines for sound operating policies.
D) guarantee bankers will make sound management decisions.
E) guarantee bankers act in an ethical manner.

Correct Answer: