Discounting is no longer needed because the presence of the FDIC eliminates the possibility of bank...
Discounting is no longer needed because the presence of the FDIC eliminates the possibility of bank panics.
Is this statement true, false, or uncertain? Explain your
answer.
Homework Answers
It is false that discounting is no longer required because FDIC eliminates the possibility of bank panics.
This is because though the presence of FDIC facilitates a lot of the operations of the bank, If the FED does not provide loans for discounting it could lead to the problem of "chain reactions" and FDIC would not be able to prevent the possibility of bank panics.
Hope this helps.
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