What Is the Primary Argument for Not Giving Depositors Greater

question 7

Multiple Choice

What is the primary argument for not giving depositors greater incentive to monitor financial institutions?

• A) Experts do not believe that depositors are capable of monitoring banks and imposing discipline on them.
• B) Banks could be subject to more frequent runs by nervous depositors.
• C) Both A and B are correct.
• D) Neither A nor B is correct.

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Definitions:

News Releases

Official statements issued to the media to announce something of interest.

Organizations

Groups of people with a particular purpose, such as businesses, governments, or charities, structured to achieve collective goals.

Policy Statements

Official documents that outline an organization's principles, intentions, and positions on various issues.

Procedural Changes

Adjustments or modifications made to the established way of doing things, often to improve efficiency or effectiveness.