Document Type
Chapter of Book
Publication Date
2010
Abstract
Government safety nets in the United States and abroad focus, anachronistically, on problems of banks and other financial institutions, largely ignoring financial markets which have become major credit sources for consumers and companies. Besides failing to protect these markets, this narrow focus encourages morally hazardous behavior by large institutions, like AIG and Citigroup, that are "too big to fail." This paper examines how a safety net should be recast to protect financial markets and also explains why that safety net would mitigate moral hazard and help resolve the too-big-to-fail dilemma.
Citation
The Panic of 2008: Causes Consequences and and Implications for Reform 94-115 (Lawrence E. Mitchell & Arthur E. Wilmarth, Jr. eds., 2010)
Library of Congress Subject Headings
Securities (Law), Money market, Subprime mortgage loans, Financial crises, Bailouts (Government policy), Public finance
Included in
Available at: https://scholarship.law.duke.edu/faculty_scholarship/2306