Which of the following actions can the Federal Deposit Insurance Company take in the event of a failure of one of its insured banks?
A) The FDIC can seize the assets of the investors and settle the bank's debts.
B) The FDIC can allow the bank to stay afloat by granting a loan of federal money.
C) The FDIC can conduct an inquiry into the investors' assets and actions to determine if there was any malfeasance that caused the bank failure.
D) The FDIC can allow another bank to take responsibility for the failed bank's liabilities through sale of the failed bank.
E) The FDIC can settle the bank's debts through its insurance deposit fund and regulate the bank's transactions more strictly.

Question

Quizplus · Accepted Answer

The FDIC can allow another bank to take responsibility for the failed bank's liabilities through sale of the failed bank. This is known as a "bank resolution," where the FDIC facilitates the sale of the failed bank to another healthy bank, which assumes the failed bank's liabilities and assets. This is done to ensure that the bank's customers are protected and that there is minimal disruption to banking services in the community.

Which of the Following Actions Can the Federal Deposit Insurance