When dealing with failing financial institutions I: policymakers should avoid having depositors suffer losses
II: policymakers should avoid having shareholders suffer losses.

Question

Quizplus · Accepted Answer

The first statement is true as policymakers try to avoid depositors suffering losses in failing financial institutions to maintain public trust and stability in the financial system. The second statement is not necessarily true as shareholder losses may be incurred, as they are the owners of the institution and take on risks and potential losses.

When Dealing with Failing Financial Institutions I: Policymakers Should Avoid