The term disintermediation refers to the policy of regulating the minimum rate o

Question

The term disintermediation refers to

the policy of regulating the minimum rate of return institutions can pay on deposits. the withdrawal of deposits from depository institutions that are reinvested in other types of intermediaries. chartering restrictions that limit the ability of new banks to enter into a local market. the policy of not allowing banks to grow by creating a de novo branch outside their traditional market area. the policy of not closing insolvent institutions in hopes that they can eventually turn around their performance.

Explanation / Answer

Solution:

b)

The term " Disintermediation" is a situation under which the investors withdraw their deposits from depository insititutions and invest in other instruments in order to earn higher yields

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