Asked by London Aldridge on Jul 18, 2024
Verified
Statement I.The FDIC is now part of the Federal Reserve.
Statement II.The savings and loan crisis developed in the 1980s because the FDIC was much more lax about supervising the savings and loan associations than the commercial banks.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
FDIC
Stands for the Federal Deposit Insurance Corporation, a U.S. government agency that provides deposit insurance to depositors in American commercial banks and savings institutions, protecting them against bank failure.
Federal Reserve
The central banking system of the United States, responsible for setting monetary policy, regulating banks, and ensuring financial stability.
Savings And Loan Crisis
A financial crisis in the 1980s and 1990s involving the insolvency of numerous savings and loan associations in the United States.
- Gain insight into the regulatory system governing U.S. banks, including aspects of interstate banking and the role played by the FDIC.
- Analyze the factors contributing to the savings and loan crisis in the 1980s.
Verified Answer
PY
Princess YvonneJul 19, 2024
Final Answer :
D
Explanation :
The FDIC (Federal Deposit Insurance Corporation) is an independent agency created by Congress and is not part of the Federal Reserve System. The savings and loan crisis was not due to the FDIC's lax supervision, as the FDIC primarily insures deposits at banks and does not directly supervise savings and loan associations; that was the role of the Federal Home Loan Bank Board (FHLBB) at the time.
Learning Objectives
- Gain insight into the regulatory system governing U.S. banks, including aspects of interstate banking and the role played by the FDIC.
- Analyze the factors contributing to the savings and loan crisis in the 1980s.