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Can Banks Supervision Stop A Bank From Failing? |
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Answer» Bank SUPERVISION cannot entirely stop financial institutions from failing. Reasons for failure are diverse including among others internal weaknesses in financial institutions and systemic/external factors which are beyond the control of financial institutions. However, WHENEVER, an institution is envisaged to fail, Bank of UGANDA endeavours as much as possible to MINIMIZE the magnitude of loss by proactively winding up the operations of the distressed financial institution. Bank Supervision cannot entirely stop financial institutions from failing. Reasons for failure are diverse including among others internal weaknesses in financial institutions and systemic/external factors which are beyond the control of financial institutions. However, whenever, an institution is envisaged to fail, Bank of Uganda endeavours as much as possible to minimize the magnitude of loss by proactively winding up the operations of the distressed financial institution. |
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