Explain how compensating balances help to resolve the moral hazard problem in bank lending.

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Money, Banking, Financial Markets and Institutions

ISBN: 978-0538748575

1st edition

Authors: Michael Brandl

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Question Posted: Jun 21, 2019 07:24 AM

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Explain how compensating balances help to resolve the moral hazard problem in bank lending.

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They sometimes require that borrower to maintain at the bank ...View the full answer

Money, Banking, Financial Markets and Institutions

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