How Do Deposit Insurance and the "Too Big to Fail"
How do deposit insurance and the "too big to fail" policy increase moral hazard?
Provide one example from the 2008-2009 financial crisis in the United States of how the following types of policies were used to respond to the crisis.a.conventional monetary and fiscal policy b.lender of last resort c.injections of government funds
Provide one argument in favour of and one argument against each of the following proposals to prevent future financial crises.a.require shadow banks to hold more capital b.give the deposit-insurance agency resolution authority over shadow banks c.impose higher capital requirements on larger banks d.prohibit banks from making speculative investments
Provide specific examples from the 2008-2009 financial crisis in the United States of each of the five stages of a financial crisis.a.asset-price booms and busts b.insolvencies of financial institutions c.falling confidence in the financial system d.credit crunch e.recession