The prompt corrective action program of the FDIC Improvement Act allows a bank or thrift to be placed into receivership when the book value of capital to assets falls below 2 percent.
Correct Answer:
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Q20: Moral hazard provides an incentive for bank
Q21: The regulatory practice of excessive capital forbearance
Q22: The improved financial health of the FDIC
Q23: Because deposit insurance premiums were not priced
Q24: Currently in the U.S., deposit insurance premiums
Q26: The ability of the FDIC to place
Q27: The use of the option pricing model
Q28: The cost of insolvency of an FI
Q29: Requiring higher capital ratios often is proposed
Q30: Risk-based capital supports risk-based deposit insurance premiums
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