1. Explain the moral hazard problem that arises with deposit insurance.2. How does the lender of last resort function create moral hazard?23. Regulations have traditionally required banks to maintain capital-asset ratios of acertain level to ensure adequate net worth based on the size and composition of thebank's assets on its balance sheet. Why might such capital adequacy requirementsnot be e ective?
moral has nothing to do with finance 2) same answer 3) what is eective? learn economics money makes money and those who control banks have great power learn about the unregulated banks of the early 1900s. the depression of 1906 and J. P Morgan banking started about the 1600s without regulations the very rich get everything
