In the ten years after the FDIC limit was increased to $100,000:
A) more than four times the number of banks and savings and loans failed than did during the first 46 years of FDIC's existence.
B) less than one-fourth the number of banks and savings and loans failed than during the first 46 years of FDIC's existence.
C) the cost to taxpayers of failed institutions in that period was negligible because FDIC was in place.
D) increasing the deposit insurance limit to $250,000 provided complete coverage for all deposits except those of large corporations.

Question

Quizplus · Accepted Answer

In the ten years after the FDIC limit was increased to $100,000, more than four times the number of banks and savings and loans failed than did during the first 46 years of FDIC's existence. This indicates that increasing the limit did not necessarily protect banks from failure and may have even contributed to increased risk-taking behavior.

In the Ten Years After the FDIC Limit Was Increased