Crs Report for Congress: Systemically Important or Too Big to Fail Financial Institutions - Softcover

LaBonte, Marc

 
9781293273036: Crs Report for Congress: Systemically Important or Too Big to Fail Financial Institutions
Softcover
ISBN 10: 1293273031 ISBN 13: 9781293273036
Publisher: Bibliogov, 2013

Synopsis

Although "too big to fail" (TBTF) has been a perennial policy issue, it was highlighted by the
near-collapse of several large financial firms in 2008. Financial firms are said to be TBTF when
policymakers judge that their failure would cause unacceptable disruptions to the overall financial
system, and they can be TBTF because of their size or interconnectedness. In addition to fairness
issues, economic theory suggests that expectations that a firm will not be allowed to fail creates
moral hazard-if the creditors and counterparties of a TBTF firm believe that the government
will protect them from losses, they have less incentive to monitor the firm's riskiness because
they are shielded from the negative consequences of those risks.

"synopsis" may belong to another edition of this title.

Publisher
Bibliogov
Publication date
2013
Language
English
ISBN 10 
1293273031
ISBN 13 
9781293273036
Binding
Paperback
Number of pages
60