Question

If a Commercial Bank fails to honour its depositor's money, it leads to ____________ (bank panic / bank failure)​

Answer 1

Explanation:

bank failure

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Answer 2

Answer:

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If the failing bank cannot pay its depositors, a bank panic might ensue in which depositors run on the bank in an attempt to get their money back. This can make the situation worse for the failing bank, by shrinking its liquid assets as depositors withdraw cash from the bank.

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