Why is the adoption of the Market Value Accounting MVA an attractive feature in the overall design of the deposit insurance reform?
A) MVA requires that all assets and liabilities be marked-to-market and therefore reflects the health of a financial institution better.
B) MVA can be used to assess how much risk a financial institution is taking and thus allows the regulator to properly implement the risk-based deposit insurance premia scheme.
C) MVA removes the necessity to regulate the banks since all risk is properly assessed by the market and fairly reflected on the balance sheet.
D) a and b
E) all of the above
Correct Answer:
Verified
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