The federal government has traditionally extended safety nets to DIs consisting of

Question

Quizplus · Accepted Answer

The traditional safety nets provided by the federal government to depository institutions (DIs) include deposit insurance and discount window borrowing. Deposit insurance protects depositors' funds up to a certain threshold, while discount window borrowing allows DIs to borrow funds from the Federal Reserve at a discount rate in times of need. Reserve requirements and open market operations are tools used by the Federal Reserve to control the money supply and interest rates, but they are not safety nets for DIs. Unemployment insurance is a safety net for individuals who have lost their jobs, not for DIs.

The Federal Government Has Traditionally Extended Safety Nets to DIs