The Moral Hazard Problem Created by the Institution of the Lender-Of-Last

Multiple Choice

The moral hazard problem created by the institution of the lender-of-last resort facility is

A) there is an incentive to take less deposits
B) there is an incentive to maintain less liquid assets
C) there is an incentive to mismatch the duration of assets and liabilities
D) only b and c
E) all of the above