The too-big-to-fail policy

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The too-big-to-fail policy

A) reduces moral hazard problems.
B) puts large banks at a competitive disadvantage in attracting large deposits.
C) treats large depositors of small banks inequitably when compared to depositors of large banks.
D) allows small banks to take on more risk than large banks.

Answer: The correct answer is treats large depositors of small banks inequitably when compared to depositors of large banks.

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