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3 July, 11:16

The possibility that the failure of one bank can hasten the failure of other banks is called the:

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  1. 3 July, 14:37
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    Contagion Effect

    Explanation:

    Contagion Effect is the spread of an economic crisis from one market or a region to another. It refers the diffusion effect of crisis throughout a market.

    Simply put, If a large bank sells off most of its assets quickly, the confidence in other banks declines.

    Hence, it's said to have followed the contagion effect, spread of a crisis from one market to another.
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