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If banks experience high default risk on a sovereign bond and the bond experiences higher interest rate and higher bond yields, banks uses assets to
If banks experience high default risk on a sovereign bond and the bond experiences higher interest rate and higher bond yields, banks uses assets to meet to its debt obligations, does it mean that their balance sheet will experience a fall in amount of assets and then they will have to sell or issue new bonds to increase capital to maintain their caiptal-asset ratio?
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