Which of the Following Reasons Explain Why Federal Regulators Adopted

question 41

Multiple Choice

Which of the following reasons explain why federal regulators adopted a policy of regulatory forbearance toward insolvent financial institutions in the early 1980s?

• A) The FSLIC lacked sufficient funds to cover insured deposits in the insolvent S&Ls.
• B) The regulators were reluctant to close the firms that justified their regulatory existence.
• C) The Federal Home Loan Bank Board and the FSLIC were reluctant to admit that they were in over their heads with problems.
• D) All of the above are reasons.
• E) Only A and B of the above are reasons.

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Definitions:

Secure Location

A place that has been made safe against unauthorized access, attack, or other threats.

Checking Account

A bank account that allows the depositor to withdraw funds using checks or electronic debit, traditionally used for daily transactions.

Stale Check

A check that has not been cashed or deposited within a specified time, usually six months, making it void or invalid.

Bank

A financial institution that accepts deposits, offers various accounts, provides loans, and offers other financial services to individuals and businesses.