The least costly transaction method for the FDIC to close an insolvent bank is

Question

Quizplus · Accepted Answer

The purchase and assumption method involves the FDIC selling the failed bank's assets and deposits to a healthy bank. This method is usually the least costly because the acquiring bank takes on the majority of the failed bank's assets and deposits, and the FDIC only has to pay the insured depositors any shortfall between their deposits and the value of the assets acquired. This method also helps maintain stability in the banking system, as the healthy bank can continue to service the failed bank's customers.

The Least Costly Transaction Method for the FDIC to Close