Thursday, August 29, 2013

Wren-Lewis on the Moral Hazzard of Bank Risk

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The subsides to big banks in the form of the implicit offer of  government bailouts because they are too big to fail explains why they risk holding so much debt.  Government's too big to fail fixation is explained by lobbying.
 
Simon Wren-Lewis, "Banks, Economists and Politicians: Just Follow the Money," mainlymacro.blogspot.com, August 26, 2013

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