If the public and community loses trust in banks, that lack of trust could adversely affects the entire U.S. financial system if depositors become reluctant to leave their savings in banks. In order to keep this type of financial crisis from happening, the Fed decreases the money supply while acting as the lender of last resort. O guides and regulates private deposit insurance programs to cover insolvent bank losses. O makes as needed short-term emergency loans, by acting as the lender of last resort