Since the 1930s, Following Banking Crises, If Financial Institutions Are

question 180

Multiple Choice

Since the 1930s, following banking crises, if financial institutions are not able to borrow in private credit markets:

• A)the Federal Reserve takes a laissez-faire attitude, allowing market forces to determine which institutions will survive.
• B)the Federal Reserve may act as a lender of last resort.
• C)the U.S. Treasury may make short-term loans to them.
• D)they are not allowed to engage in maturity transformation until their financial condition improves.

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