The existence of the "too big to fail" doctrine may encourage large banks to take excessive risks in securities underwriting activities.

Question

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The "too big to fail" doctrine may make banks feel that they will be bailed out by the government if their risky activities lead to losses, which encourages them to take excessive risks. This includes securities underwriting activities which involve the creation and sale of securities to investors.

The Existence of the "Too Big to Fail" Doctrine May