12-39 Identify the legislation that required bank regulators to incorporate credit concentration risk into their evaluation of bank insolvency risk.

Question

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The FDIC Improvement Act of 1991 required bank regulators to incorporate credit concentration risk into their evaluation of bank insolvency risk. This was a response to the savings and loan crisis of the 1980s, which highlighted the dangers of allowing banks to become overly concentrated in a particular type of loan or industry. The other options listed are all banking laws passed in the United States, but none specifically address credit concentration risk in the same way as the FDIC Improvement Act.

12-39 Identify the Legislation That Required Bank Regulators to Incorporate