Question

In: Economics

Even though deposit insurance existed, the United States experienced a major financial crisis from 2007 to 2009 because:


Even though deposit insurance existed, the United States experienced a major financial crisis from 2007 to 2009 because: 

  • banks refused to honor the deposit insurance scheme. 

  • the deposit insurance system failed during that time. 

  • there was a run on shadow banks, which were not covered by deposit insurance. 

  • there was excess competition from other countries.

Solutions

Expert Solution

Option B is correct


i.e
The deposit insurance system failed during that time.


the ability of financial institutions to influence policies of governments and regulators are also known as a regulator recapture work experience after the breakdown of the global financial system. Financial institutions are a big source of political funding.various political consequences where observed in the wake of the crisis.

Rahul Sunny answered 2 years ago
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