The problem of moral hazard that resulted from federal deposit insurance can be attributed to all of the following except

Question

Quizplus · Accepted Answer

Risk aversion by managers of banks plus bank examination is not a contributing factor to the problem of moral hazard resulting from federal deposit insurance. The other options, depositors having little incentive to monitor their bank, deposit premiums not depending on risk, and the incentive of bank stockholders to increase risk because of the disproportionate sharing of success and failure, are all contributing factors to the problem of moral hazard.

The Problem of Moral Hazard That Resulted from Federal Deposit