While Deposit Insurance Was Designed to Make the Banking Industry

question 185

Multiple Choice

While deposit insurance was designed to make the banking industry more stable,it contributed to the banking crisis of the 1980s because

• A)the FDIC only insured commercial banks
• B)the ceiling on insured deposits was too low
• C)too many banks were not sufficiently insured
• D)depositors became too complacent about the risks that banks were taking
• E)unsafe banks were "kicked out" of the deposit insurance system