(Answered) A what is insolvency risk how can liquidity risk and credit

Finance

(a) What is insolvency risk? How can liquidity risk and credit risk cause insolvency? What are the two best protections against insolvency at a financial institution?

(b) What has been the recent history on CB' stress tests and in raising capital reserve requirements for those that fail the stress tests? Are these measures adequate to ensure solvency?

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