Question

Suppose a country has weak institutions, prevalent corruption, and an ineffectively regulated financial sector Would you recommend the adoption of a system of deposit insurance, like the FDIC in the United States, for this country? Based on the information given above, which of the following is likely to be a reason for not recommending the adoption of deposit insurance for this country? No Yes O A. It might increase the problem of adverse selection of potential customers by banks O B. It might increase the moral hazard incentives for banks to engage in risky lending. C. It might increase the economy's dependency on big financial institutions