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QUESTION 1B. BANK FUNCTIONS AND REGULATION (6 MARKS) Explain the concept of moral hazard associated with explicit deposit insurance. Detail two (2) ways such moral

QUESTION 1B. BANK FUNCTIONS AND REGULATION (6 MARKS)

Explain the concept of moral hazard associated with explicit deposit insurance. Detail two (2) ways such moral hazard problems can be mitigated in an explicit deposit insurance scheme.

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