Question

c. A belief that banks were ‘too big to fail’.

c.

A belief that banks were ‘too big to fail’.

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Answer #1

Too big to fail theory asserts that some of the institution specially financial institutions are so large and highly interconnected if they fail , it would be disastrous for the Economy system and hence to avoid such failure government should support such institutions at the time of potential failure. Hence government work as helping hand and considers bailing out the business or even the entire sector at the time of such potential failure for example wal street banks

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