In the United States, government rescues of failing firms are not as common as they are in some other countries. Assuming that this is expected to continue in the future, the risk premium on a given level of debt would be higher for U.S. firms than for firms in countries where government rescues are more common, everything else being equal.

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The risk premium on a given level of debt would be higher for U.S. firms than for firms in countries where government rescues are more common because there is less likelihood of government intervention to save failing firms in the U.S. compared to those other countries.

In the United States, Government Rescues of Failing Firms Are