Nigeria Financial Regulations and Institutions
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Questions and Answers

What is the term used to describe a banking crisis that affects many banks or a larger segment of the industry?

Systemic

How have experts categorized banking crises?

Into Microeconomic and Macroeconomic factors

What is an example of a Microeconomic factor that can contribute to a banking crisis?

Poor lending practices

What is an example of a Macroeconomic factor that can contribute to a banking crisis?

<p>Harsh monetary policies</p> Signup and view all the answers

What type of banking crisis is characterized by having adequate assets over liabilities but inadequate cash?

<p>Illiquid but solvent</p> Signup and view all the answers

What type of banking crisis is characterized by having cash but inadequate assets over liabilities?

<p>Insolvent but liquid</p> Signup and view all the answers

What is the term used to describe a banking crisis that is easily resolvable with minimal intervention?

<p>Mild crisis</p> Signup and view all the answers

What is the term used to describe a banking crisis that is severe and may require significant intervention or even bankruptcy?

<p>Severe crisis</p> Signup and view all the answers

What is an example of a factor that can contribute to a bank's failure?

<p>Lack of internal controls</p> Signup and view all the answers

What is an example of a factor that can contribute to a bank's failure, related to the macroeconomic environment?

<p>Unfavorable exchange rates</p> Signup and view all the answers

Flashcards

Systemic Banking Crisis

A banking crisis affecting many banks or a large industry segment.

Banking Crisis Factors

Microeconomic: Poor lending; Macroeconomic: Harsh monetary policies.

Microeconomic Factor

Poor lending practices.

Macroeconomic Factor

Harsh monetary policies.

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Illiquid but Solvent

Adequate assets but inadequate cash.

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Insolvent but Liquid

Adequate cash but inadequate assets.

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Mild Crisis

Easily resolvable with minimal intervention.

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Severe Crisis

Severe, requiring significant intervention or bankruptcy.

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Bank Failure Factor

Lack of internal controls.

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Macroeconomic Factor

Unfavorable exchange rates.

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