When a Financial Institution Is Deemed Too Systematically Important to Go

question 73

Multiple Choice

When a financial institution is deemed too systematically important to go under, it is ________. This leads to ________.

• A) a monopoly; above-marginal cost pricing
• B) too big to fail; moral hazard
• C) an "umbrella" bank; less competition
• D) a bank-holding company; adverse selection
• E) an investment bank; nationalization

---

Definitions:

Justiciable Controversy

A dispute that is appropriate for court review because it involves a real and substantial conflict between parties with legitimate interests.

Hypothetical

A theoretical situation or proposition used for the purpose of discussion, analysis, or problem-solving.

Justiciable Controversy

A genuine and concrete dispute suitable for court adjudication because it affects the legal rights of the parties involved.

Hypothetical

Based on proposed or imagined events or scenarios not grounded in reality for the purpose of discussion or analysis.