The FDIC insurance system has more responsibilities than just preventing bank runs. What is the primary...

The FDIC insurance system has more responsibilities than just preventing bank runs. What is the primary reason that the FDIC is required to apply "prompt corrective action" or PCA in order to resolve or shut down critically undercapitalized banks, i.e., why should a bank NOT be allowed to continue operating without any constraints when its capital base has dropped to such a low level.

	A.	Prevent bank runs
	B.	None of the other responses are correct
	C.	Protect the FDIC deposit insurance fund from further unnecessary losses
	D.	Protect bank owners from decreasing the risk of the bank
	E.	Protect uninsured deposits

Expert Solution

Option C is correct

Protect the FDIC deposit insurance fund from further unnecessary losses

jeff jeffy answered 2 years ago

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