Deposit insurance shifts most of the financial risk of bank failures from depositors to ______.

Question

Quizplus · Accepted Answer

Deposit insurance is provided by the federal government, which means that in the event of a bank failure, the government will bear most of the financial risk instead of individual depositors. This is meant to protect the average depositor from losing their savings due to circumstances beyond their control. Therefore, the correct answer is (A) the federal government.

Deposit Insurance Shifts Most of the Financial Risk of Bank