Why did the fixed-rate deposit insurance system fail to induce insured and uninsured depositors to impose discipline on risky Dls in the United States in the 1980s?

a. How is it possible to structure deposits in a DI to reduce the effects of the insured ceiling?

b. What are brokered deposits? Why are brokered deposits considered more risky than nonbrokered deposits by DI regulators?

c. How did FIRREA and FDICIA change the treatment of brokered deposits from an insurance perspective?

d. What trade-offs were weighed in the decision to leave the deposit insur- ance ceiling at $100,000 in 2005 and then to increase the ceiling to $250,000 in 2009? LO.1