The FDIC prefers to use the purchase and assume strategy to deal with a failed bank rather than the pay off and liquidate approach because it is typically

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The FDIC often opts for the purchase and assume strategy because it is generally less expensive compared to the pay off and liquidate approach. This method involves another bank assuming the deposits and purchasing some or all of the failed bank's assets, which can be more cost-effective than paying out insurance to depositors and liquidating assets.

The FDIC Prefers to Use the Purchase and Assume Strategy