20min chapter

The Seen and the Unseen - hosted by Amit Varma cover image

Ep 397: Larry White and the First Principles of Money

The Seen and the Unseen - hosted by Amit Varma

CHAPTER

Navigating Moral Hazards in Banking

This chapter explores the moral hazard problem linked to bank bailouts and the role of lender of last resort policies in the financial system. It discusses how deposit insurance can lead to riskier banking practices and the challenges regulators face in ensuring accountability within the industry. The conversation also emphasizes the need for a diverse banking ecosystem and the principle of allowing banks to fail to foster a more resilient economy.

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