The programs enacted to bail out the ﬁnancial system from crisis in 2007 and 2008 helped alleviate the moral hazard
problem in the ﬁnancial industry.

Question

Quizplus · Accepted Answer

The programs enacted to bail out the financial system from crisis in 2007 and 2008 actually worsened the moral hazard problem in the financial industry by creating a perception that the government would always bail out banks and financial institutions, regardless of their risky behavior.

The Programs Enacted to Bail Out the ﬁNancial System from Crisis