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Question
How is the cost of a systemic risk exemption to the least-cost resolution of bank failures shared among banks?
A. It is shared equally among all other insured banks.
B. Additional deposit insurance premiums are imposed on FIs based on their size as measured by their total deposits and borrowed funds excluding subordinated debt.
C. Additional deposit insurance premiums are imposed on FI based on their size as measured by their total deposits and borrowed funds including subordinated debt.
D. It is shared equally among all other insured banks based on the profits earned by the FI during the year.
E. The cost is borne by the bank whose run was responsible for the contagion.
Answer
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