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which factor(s) help(s) to reduce the potential economic consequences of banks facing a liquidity problem? i. the existence of the fdic ii. the fed's role as lender of last resort iii. the existence of the federal open market committee

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The factors which help reduce the economic consequences that banks could potentially face with a liquidity problem are:

  • i. the existence of the FDIC
  • ii. the Fed's role as lender of last resort

How is the liquidity problem reduced for banks?

When banks have a liquidity problem, it means that they do not have enough deposits on hand to be able to meet the demands of customers who come to withdraw money. This could lead to a run on banks as people desperately try to get their money out. The government has several systems in place to prevent such a thing from happening.

One of them is the existence of the Federal Deposit Insurance Corporation ( FDIC ) which has the role of insuring the amounts that people deposit in banks up to a certain extent. If the bank does not have deposits, the Federal Deposit Insurance Corporation steps in. There is also the Fed's role as the lender of last resort which means it can loan banks money to allow them to meet customer demand.

Find out more on bank liquidity problems at https://brainly.com/question/27961862

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