What Is the Benefit of a Regulatory Guarantee or Insurance

question 11

Multiple Choice

What is the benefit of a regulatory guarantee or insurance program for liability holders of FIs?

• A)It decreases the likelihood contagious runs.
• B)It increases concerns about the asset quality of FI.
• C)It increases concerns about solvency of an FI.
• D)It provides incentives to liability holders to engage in bank runs.

---

Definitions:

Formal Labor Relations

Refers to structured and legally governed interactions between employers, employees, and their representatives.

Multinational Corporation

A company that operates in multiple countries, managing production or delivering services in more than one country.

Centralized

A structure or system where decision-making authority is concentrated at a single point or in a single organizational entity.

Shareholder Value Model

A corporate governance approach that prioritizes maximizing the value for shareholders through strategies, policies, and business decisions.