One of the serious drawbacks of the deposit insurance system in the United States is that:
A)bank failures continue to occur regularly.
B)the system took away the Federal Reserve's ability to conduct open-market operations.
C)the system took away the Federal Reserve's ability to change reserve requirements.
D)if insured intermediaries make many bad loans, the taxpayers may be responsible for covering the losses.

Question

Quizplus · Accepted Answer

Insured banks and other intermediaries pay for deposit insurance, but the people of the U.S. may be responsible for huge losses that deplete the insurance fund.

One of the Serious Drawbacks of the Deposit Insurance System