1-69 Negative externalities exist in the depository sector when

Question

Quizplus · Accepted Answer

All of the above statements are examples of negative externalities in the depository sector. The fear of DI insolvency can lead to bank deposit runs, which can harm the lending activity of healthy banks. Delays in disbursements from insolvent DIs can have a ripple effect on the broader financial system, and when one bank nears insolvency, it can have spillover effects that harm other healthy banks.

1-69 Negative Externalities Exist in the Depository Sector When