Final answer:
Companies face economic risks such as asset seizure from unpredictable events, which can devalue assets and affect loan availability. Bank supervision is challenged by accurately measuring asset values and managing complex international loans and financial deals. Asset devaluation can restrict loans and negatively impact the economy.
Step-by-step explanation:
Companies operating in the global market face various economic risks, one significant type being the seizure of assets. This type of risk emerges from scenarios over which entities have little control, such as natural disasters, war, or significant socio-economic upheavals leading to massive unemployment. The implications of asset seizure are severe, as this can drastically devalue a company's holdings and affect its ability to operate. Moreover, it can trigger widespread economic consequences, such as the curtailing of loans, which, in turn, can be detrimental to crucial economic sectors that rely on borrowing, as evident by the 2008-2009 Great Recession.
Additionally, when discussing bank supervision, the complexity increases when banks hold loans from entities in multiple countries or when engaging in complex financial arrangements that go beyond basic lending. Bank supervision must grapple with practical and political issues, including accurately valifying the bank's assets based on the repayment risk associated with their loans. This can cause considerable strain if banks face financial stress due to asset devaluation, leading to restricted loan availability and potential damage to the broader economy.