Which of the following are regulations that are designed to reduce the moral hazard created by deposit insurance?
Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers. (Please highlight the correct answer(s))
-Regulators can restrict competition so that banks are not under as much pressure to engage in risky investments.
-U.S. banks are not allowed to hold any common stock or bonds.
-U.S. banks are not allowed to hold common stock or bonds that are below investment grade.
-U.S. banks cannot make loans to single borrowers that exceed 50 percent of their capital.
-Regulators can prohibit banks from making certain types of risky loans and from purchasing particular securities.