In the months following the collapse of Lehman Brothers, banks became increasingly worried about:
A) rising real estate prices.
B) lending money via commercial paper.
C) the rapid loss of reserves.
D) spikes in the federal funds rate.
E) exchange rate volatility.

Question

Quizplus · Accepted Answer

Banks were worried about lending money via commercial paper due to the increased risk of default and the overall uncertainty in the financial markets following the collapse of Lehman Brothers.

In the Months Following the Collapse of Lehman Brothers, Banks