How Is the Cost of a Systemic Risk Exemption to the Least-Cost

question 103

Multiple Choice

How is the cost of a systemic risk exemption to the least-cost resolution of bank failures shared among banks?

• A)It is shared equally among all other insured banks.
• B)Additional deposit insurance premiums are imposed on FIs based on their size as measured by their total deposits and borrowed funds excluding subordinated debt.
• C)Additional deposit insurance premiums are imposed on FI based on their size as measured by their total deposits and borrowed funds including subordinated debt.
• D)It is shared equally among all other insured banks based on the profits earned by the FI during the year.
• E)The cost is borne by the bank whose run was responsible for the contagion.

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