Question: 1. a) Distinguish between implicit and explicit deposit insurance. Give specific examples to illustrate their differences.(8 marks) b) Explain the moral hazard behaviour induced by

1. a) Distinguish between implicit and explicit deposit insurance. Give specific examples to illustrate their differences.(8 marks)

b) Explain the moral hazard behaviour induced by deposit insurance. (4 marks)

c) Explain two (2) features that can be built into a deposit guarantee scheme to mitigate the moral hazard discussed in part (B). (6 marks)

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