Question

Which of the following actions could be used to resolve the too-big-to-fail problem? A. Encourage branch...

Which of the following actions could be used to resolve the too-big-to-fail problem?

A.

Encourage branch banking
B.

Repeal the Dodd-Frank regulations
C.

Require large banks to hold higher reserves
D.

Force large banks to merge
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Answer #1

The correct option is C, large banks should be required to hold higher reserves. It is important to learn that Dodd-Frank regulations were introduced to promote the financial stability of U.S by improving accountability and transparency in the financial system and to end "too big to fail". Therefore repealing this act will not resolve the problem, it will exacerbate it.

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