In Emerging Markets, a Banking Crisis Threatens the Peg When

Multiple Choice

In emerging markets, a banking crisis threatens the peg when a bailout occurs because:

A) the central bank will act too cautiously.
B) the central bank will bail out other financial firms as well.
C) the central bank cannot then lend to other solvent banks.
D) fear of unsafe banks might encourage depositors to convert funds into foreign currency deposits offshore.