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29 October, 21:37

In deleveraging Agency financing cannot be applied

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  1. 29 October, 21:52
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    True.

    Explanation:

    Deleveraging is when there is a fall in loan value which makes worth of financial intermediaries drop hence reduce amount of loan given to individuals or organizations. This will make these organizations sell off their assets in order to cover their exposure to debts.

    When an institution is experiencing deleveraging, it means there is financial crisis in there hence agency financing cannot be applied. It will also lead to contraction of economic activity in the country.
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