The Argument That Deposit Insurance Can Prevent the Failure of an Otherwise

Multiple Choice

The argument that deposit insurance can prevent the failure of an otherwise sound bank is based on the idea that

A) bank examinations by the Canada Deposit Insurance Corporation (CDIC) weed out badly managed banks.
B) the existence of deposit insurance may prevent self-fulfilling panics.
C) potential deposits need not be concerned about account overdrafts.
D) deposit insurance restores confidence in the stock market.
E) deposit insurance restores confidence in the bond market.