What kind of measures did FIRREA introduce to handle failed financial institutions?

The correct answer highlights the measures introduced by the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). This legislation was enacted in response to the savings and loan crisis of the 1980s and aimed to stabilize the banking system, which had been severely impacted by numerous financial institution failures.

FIRREA established protocols for government intervention when a financial institution failed. This included the creation of the Resolution Trust Corporation (RTC), which was tasked with handling the assets of failed savings and loan associations and ensuring that depositors' money was protected. Additionally, FIRREA implemented stricter regulations and oversight to prevent future failures and improve the overall stability of the financial system. By instigating these federal interventions, the act sought to restore confidence in the banking sector and protect consumers.

The other options do not accurately reflect the primary measures of FIRREA. Market-based resolutions are more characteristic of private sector problem-solving strategies, tax incentives for banks do not directly relate to managing institutional failures, and complete privatization of banking services runs contrary to the government's role established by FIRREA to safeguard the financial system. Thus, the chosen answer appropriately encapsulates the essence of the protective frameworks introduced by FIRREA in dealing with failed financial institutions.