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Explain why depository institutions receive a disproportionate amount of attention from government regulators (compared to most...

Explain why depository institutions receive a disproportionate amount of attention from government regulators (compared to most other industries).

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Answer #1

Depository institutions are the institutions which take deposits from savers and pay interest to the savers. For example, a bank is a depository institution which takes deposits from savers. Therefore, depository institutions are entrusted with the hard earned money and lie's savings of people. Also, depository institutions serve as a very important element in the financial system which helps in making credit available to firms and other investors.  Therefore, creating trust in the depository institutions is crucial to the mobilization of savings, availability of credit and economic growth and development.

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