What Is the Benefit of a Regulatory Guarantee or Insurance

Multiple Choice

What is the benefit of a regulatory guarantee or insurance program for liability holders of FIs?

A) It decreases the likelihood contagious runs.
B) It increases concerns about the asset quality of FI.
C) It increases concerns about solvency of an FI.
D) It provides incentives to liability holders to engage in bank runs.
E) It provides preference to those who are first in line to withdraw funds over those last in line.