The cost of insolvency of an FI to the FDIC is offset in part by the deposit insurance premiums paid by the bank.

Question

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The FDIC collects deposit insurance premiums from insured banks, which are used to fund the deposit insurance system and cover the costs of resolving failed banks. Therefore, the cost of insolvency of an FI is offset in part by the deposit insurance premiums paid by the bank.

The Cost of Insolvency of an FI to the FDIC