8. Bankers have incentives to misuse deposits by taking on excessive risk or by looting. Deposit insurance

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8. Bankers have incentives to misuse deposits by taking on excessive risk or by looting. Deposit insurance exacerbates this moral hazard problem because it reduces depositors’ incentives to monitor banks. LOP8

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Macroeconomics And The Financial System

ISBN: 9781429253673

1st Edition

Authors: N. Gregory Mankiw, Laurence Ball

Question Posted: Sep 30, 2024 04:00 AM

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8. Bankers have incentives to misuse deposits by taking on excessive risk or by looting. Deposit insurance

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Macroeconomics And The Financial System

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