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A significant amount of legislation passed in the 20th century sought to reduce the risk of future economic events like the liquidity crisis
experienced by banks during the Panic of 1907. Which of the following policies would increase the risk of a liquidity crisis?

Respuesta :

The policy which would would increase the risk of a liquidity crisis is Banks

being  required to store a smaller percentage of depositor funds in their

vaults.

Liquidity occurs when there is an increase in demand and decrease in

supply. Banks usually have a large percentage of depositor funds stored in

their vault to prevent these occurrence.

In situations whereby they store a smaller percentage of depositor funds in

their vaults , it will lead to a liquidity crisis as they won't be able to cater for

the immediate needs of the depositors.

Read more about Liquidity crisis here https://brainly.com/question/921670

Answer:

Banks are required to store a smaller percentage of depositor funds in their vaults.

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