The result of the too-big-to-fail policy is that ________ banks will take on ________ risks,making bank failures more likely.

Question

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The too-big-to-fail policy essentially means that the government will bail out large banks in the event of their failure. This creates a moral hazard where these banks may take on greater risks without worrying about the consequences because they know they will be bailed out. Therefore, the result of this policy is that large banks will take on greater risks, making bank failures more likely.

The Result of the Too-Big-To-Fail Policy Is That ________ Banks