CHAPTER 10 The Deposit Contract and Insurance

“As to guaranteeing bank deposits, the minute the government starts to do that, … the government runs into a probable loss. We do not wish to make the United States government liable for the mistakes and errors of individual banks, and put a premium on unsound banking in the future.”

Franklin Delano Roosevelt, in his first press conference as President of the United States

Glossary of Terms

Charter Value: The economic value of a bank to its owners (the shareholders). It can be viewed as the net present value of the profits expected to accrue to the shareholders over the life of the bank.

Null Hypothesis: In statistical-decision theory, when we believe something is true, we formulate the null ...

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