When many depository institutions--especially thrifts--failed in the 1970s and 1980s,
A)most depositors got their money back
B)most depositors lost everything
C)most of the losses to depositors were paid out of the pockets of the owners of these institutions
D)the U.S.taxpayer,fortunately,avoided bearing any of the financial burden of the losses
E)the entire economy collapsed and the country was plunged into a severe depression

Question

Quizplus · Accepted Answer

Most depositors got their money back due to the existence of the Federal Deposit Insurance Corporation (FDIC), which insured deposits up to a certain amount in the event of a bank failure. While some depositors may have lost some money if their deposits exceeded the insured amount, the majority of depositors were protected by the FDIC. Additionally, the Federal Savings and Loan Insurance Corporation (FSLIC) insured deposits in thrifts, providing similar protection for thrift depositors.

When Many Depository Institutions--Especially Thrifts--Failed in the 1970s and 1980s