Which of the following factors is the cause of the banking and thrift industries problems?

Question

Quizplus · Accepted Answer

Risk-insensitive deposit insurance pricing contributed to the banking and thrift industries problems by providing a safety net that encouraged excessive risk-taking by depository institutions, ultimately leading to financial instability. While factors such as fraud and excessive perquisites consumption may have played a role, the fundamental cause was the flawed deposit insurance system.

Which of the Following Factors Is the Cause of the Banking