If higher leverage is associated with greater risk, explain why the process of deleveraging (reducing leverage) can

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If higher leverage is associated with greater risk, explain why the process of deleveraging (reducing leverage) can be destabilizing.

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Money Banking and Financial Markets

ISBN: 978-0078021749

4th edition

Authors: Stephen Cecchetti, Kermit Schoenholtz

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Question Posted: Oct 02, 2014 07:54 AM

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If higher leverage is associated with greater risk, explain why the process of deleveraging (reducing leverage) can

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The problem arises if too many institutions try to reduce their l...View the full answer

Money Banking and Financial Markets

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