Deposit insurance indirectly helped to create the savings and loan crisis in the United States during the 1980s.

Question

Quizplus · Accepted Answer

The deposit insurance provided by the federal government caused many S&Ls to take excessive risks, knowing that the government would cover the losses if the investments turned sour. This led to a wave of failures and closures in the industry, ultimately costing taxpayers billions of dollars.

Deposit Insurance Indirectly Helped to Create the Savings and Loan