bank collapse prevention

Bank collapse prevention involves measures to ensure banks can meet their financial obligations and maintain stability. Regulators monitor banks’ health by checking their capital levels, managing risks, and ensuring they hold enough liquid assets to handle withdrawals. They also perform regular audits and set rules to reduce risky behaviors. In crises, authorities may provide emergency support, like loans or guarantees, to prevent a bank’s failure from triggering broader economic disruptions. Overall, these strategies promote trust, safeguard deposits, and maintain a resilient financial system.