Because a decrease in capital leads to a lower perceived value of insurers among potential insureds and investors, capital depletion influenced the drop in bankruptcy' share prices.
In conjunction with the overall economic slowdown, the drop in insurance demand. The all-powerful CEO (the duality factor and related Board independence issues), a weak system of management control, a focus on short-term performance goals , a weak code of capital, and opaque disclosures were the key, recurring structural factors. When Bank of America declared bankruptcy in 2008, it shook people's faith in banks so much that a new class of asset emerged that was not backed by any formal bank.
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