Government regulations to insure the safety of bank deposits and to control the money supply include

Question

Quizplus · Accepted Answer

Limitations on the types and quantities of assets in which banks may invest are a common government regulation to insure the safety of bank deposits and to control the money supply. This regulation helps to prevent banks from taking on excessive risk and investing in assets that may lead to insolvency. Elimination of the need for required reserves and setting interest rate ceilings on savings and money market deposit accounts are not effective ways to control the money supply or insure bank deposits.

Government Regulations to Insure the Safety of Bank Deposits and to Control