By allowing Lehman to fail, the Federal Reserve worsened the moral hazard problem between regulators and financial institutions.

Name: By allowing Lehman to fail, the Federal Reserve worsened the moral hazard problem between regulators and financial institutions.
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Question

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Allowing Lehman Brothers to fail was seen as a move to counteract moral hazard by showing that not all institutions would be bailed out, thus holding financial institutions accountable for their actions.

By Allowing Lehman to Fail, the Federal Reserve Worsened the Moral