a) The uses of deposit insurance might make a financial crisis more likely to occur. Briefly explain (with not more than 100 words) whether you agree it or not. (5 marks)

b) Explain with not more than 200 words that financial innovation in mortgage markets is one of the main causes for the global financial crisis of 2007-2009. (10 marks)

c) Would you expect a potential increase or decrease of credit spread when the financial crisis is emerged? Would the change of credit spread affect the firms which need additional funds for productive investment? Explain it with not more than 100 words. (5 marks)