One of the concerns about the Orderly Liquidation Authority is that it would legitimize federal bailouts of large financial entities and thus increase the ________ problem.
A)too-big-to-fail
B)regulatory forbearance
C)lemons
D)fiduciary

Question

Quizplus · Accepted Answer

The Orderly Liquidation Authority is seen as potentially reinforcing the idea that some financial entities are "too-big-to-fail" and will be bailed out by the government in case of a crisis. This can further exacerbate the problem of moral hazard, where these institutions take greater risks assuming they will not face the full consequences of their actions. The other choices are not directly related to the Orderly Liquidation Authority.

One of the Concerns About the Orderly Liquidation Authority Is