Implicit government guarantees (too-big-to-fail) are a critical amplifier of crises, linked to the debt story: if you get a great return in good states of nature and are bailed out in bad states, your willingness to borrow and take risk rises—corroborated by the fact that private debt before a crisis often becomes public debt afterward.

causalpending

Speaker

Carmen Reinhart

Evidence Quote

the issues of implicit guarantees at Charlies making you senator is a terribly important one it is very linked to to to our death story

Source

Carmen Reinhart on Financial Crises 11/23/2009EconTalk
Created: 6/15/2026, 9:20:19 AM

My Notes

Loading notes...