One purpose of interest-rate ceilings was to:
A)establish a ceiling on bank profits.
B)establish a floor on bank profits.
C)encourage competition in other areas.
D)eliminate the need for the FDIC.
E)reduce the chance of bank failures.

Question

Quizplus · Accepted Answer

Interest-rate ceilings were put in place to reduce the chance of bank failures by ensuring that banks did not charge excessively high interest rates to borrowers, particularly those who may be more vulnerable or less creditworthy. By limiting interest rates, borrowers were less likely to default, banks were less likely to suffer losses, and the overall stability of the financial system was increased.

One Purpose of Interest-Rate Ceilings Was To