Moral Hazard Debate
The discussion centers on the persistent skepticism surrounding the moral hazard problem associated with bailouts. Gary highlights the challenges of effective supervision and regulation, arguing that simply tightening rules will not suffice to prevent systemic failures. He emphasizes that historical evidence supports the notion that the "too big to fail" issue remains unresolved, despite attempts to impose stricter capital requirements.In this clip
From this podcast
EconTalk
Gary Stern on Too Big to Fail
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