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Smart Reasoning:

C&E

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Qaagi - Book of Why

Causes

Effects

an accord on Thursday ... designedto preventa failing bank from wrecking the economy

agreement on a new regulatory system designedto preventa failing bank from wrecking the economy

his policies ... until they startedto causebank failures from the bad economy

a new legal frameworkto preventbank failures , Economic Times

RBI ’s primary concernis preventingbank failure

poor credit risk management which results in undue credit riskcausesbank failure

an accord ... on a new regulatory system designedto preventa failing bank from wrecking the economy

which will hand Brussels unprecedented new powersto preventfailing banks from wrecking the economy

European Parliament and Council negotiators ... designedto preventa failing bank from wrecking the economy

the other major goal beingto preventbank failure

20 CAPITAL ADEQUACY MANAGEMENT Bank management CAPITAL ADEQUACY MANAGEMENT Banks need to make decisions about the amount of capital they need for three reasons : Bank capital helpspreventbank failure

First : bank capital helpspreventsbank failure

Smart regulation , oversight , and disclosure requirements arehelps preventbank failure

to helppreventbank failure

to the Great Depressionhad ledto the Great Depression

to removal of that government in the next electioncould leadto removal of that government in the next election

to the disruption of liquidityledto the disruption of liquidity

economic downturn(passive) caused byeconomic downturn

usuallyleadsusually

from an aggregate shock that has particularly adverse consequences for one institutionmay resultfrom an aggregate shock that has particularly adverse consequences for one institution

The string of financial panics(passive) caused byThe string of financial panics

to a contraction of the money supplyleadsto a contraction of the money supply

to their failure to get the deficit downhas ledto their failure to get the deficit down

to unemployment through retrenchment of workerscan leadto unemployment through retrenchment of workers

to devaluation of the Nigerian currencycan leadto devaluation of the Nigerian currency

the damage(passive) caused bythe damage

the number ofcausedthe number of

in the tangible loss of hard assetsresultedin the tangible loss of hard assets

depositors to lose fundscould causedepositors to lose funds

in significant costs for the economycan resultin significant costs for the economy

The activation of a depositors protection fund(passive) is triggered byThe activation of a depositors protection fund

in material lossesresultsin material losses

a large proportion of the sediment load to a streamcan contributea large proportion of the sediment load to a stream

in sediment deposits at the toe of the bankresultingin sediment deposits at the toe of the bank

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Smart Reasoning:

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