A bank that wants to monitor the check payment practices of its commer

A bank that wants to monitor the check payment practices of its commercial borrowers, so that moral hazard can be reduced, will require borrowers to

A) place a bank officer on their board of directors.
B) place a corporate officer on the bank’s board of directors.
C) keep compensating balances in a checking account at the bank.
D) purchase the bank’s CDs.

ANSWER

C