Deposit insurance covers deposits up to $100,000, but as part of a doctrine called "too-big-to-fail" the CDIC sometimes ends up covering all deposits to avoid disrupting the financial system. When the CDIC does this, it uses the ________.

Question

Quizplus · Accepted Answer

The "purchase and assumption" method is used by the CDIC to cover all deposits when necessary to prevent disruption to the financial system, as it allows a healthy financial institution to purchase and assume the operations of a failing institution, including its deposits. The other choices are not relevant to this situation.

Deposit Insurance Covers Deposits Up to $100,000, but as Part