In what way does a minimum risk-based capital ratio requirement battle the moral hazard problem in banking?

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Principles of Money Banking and Financial Markets

ISBN: 978-0321339195

12th edition

Authors: Lawrence S. Ritter, William L. Silber, Gregory F. Udell

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Question Posted: Mar 06, 2018 09:27 AM

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In what way does a minimum risk-based capital ratio requirement battle the moral hazard problem in banking?

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If a bank becomes riskier this lowers the riskbased capital ra...View the full answer

Principles of Money Banking and Financial Markets

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