Question

Capital requirements for banks serve all of the following purposes EXCEPT:________.a.to offset the change in incentives caused by deposit insurance.b.to reduce deposits.c.to put to use the excess of a bank's assets over its deposits and other liabilities.d.to reduce a bank owner's incentive for excessive risk taking.

Answer 1

b. to reduce deposits

Step-by-step explanation:

A Capital requirement refers to the amount of capital that a financial institution must have to meet the requirements set by it's financial regulator. All of the answers provided are purposes that this hopes to accomplish except for reducing deposits. It actually hopes to increase deposits which means more customers that are coming in.