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Question
One of the primary reasons that investment banks were allowed to convert to bank holding companies during the recent financial crisis was recognition that
A. their operating activities were too risky and they needed the cushion of bank deposits to alleviate funding risks.
B. the industry had acquired too much capital during the previous decade.
C. bank holding companies needed the ability to underwrite new issues of corporate securities.
D. it was the only way an investment bank could qualify for federal bailout funds.
E. the Federal Reserve was unable to purchase troubled assets from investment banks, but they could from bank holding companies.
Answer
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