Banking Flashcards
1
Q
How do banks support capitalism?
A
By providing credit for businesses and individuals, enabling investment, and facilitating economic growth through efficient capital allocation.
2
Q
What is financial intermediation?
A
The process by which financial institutions, like banks, act as intermediaries between savers and borrowers.
3
Q
What is the primary function of a central bank ?
A
To maintain price stability, control inflation, and promote economic growth by managing monetary policy.
4
Q
What is credit risk in banking?
A
The risk of borrowers defaulting on their loans or other financial obligations.
5
Q
What is stress testing in banking?
A
A risk management technique used to evaluate a bank’s resilience under hypothetical adverse economic conditions
6
Q
A
