Hi Need To Submit A 250 Words Essay On The Topic Read The Case And Answer The Qu

Hi, need to submit a 250 words essay on the topic Read the case and answer the questions ( but focus more in the first question).

The difference in treatment of financial institutions during and in the aftermath of the 2008 crisis was but well order. for with large risks is the chance to succeed and/or fail, all of which the very institution must bear the most burden.

2. Many experts argue that when the government bails out a private financial institution it creates a problem called “moral hazard,” meaning that if the institution knows it will be saved, it actually has an incentive to take on more risk, not less. What do you think?

No one individual among those in search of growth wishes to fail, and so are the institutions with humans at the helm. Equally true is the very fact that entities only reap rewards commensurate to the seeds sowed. anything else only happens in the charity world. With risk, however, comes responsibility. a case where an institution has “masked” bad assets and excessive liabilities outside the proximity of determinable levels is but incurable, and a lesson of some sort must be read across the system.

It is public knowledge that by the time Lehman Brothers filed for bankruptcy with Federal Reserve, the financial crisis was well underway, and that bailing out the institution wasn’t a priority. the entire system was. To hit right at the tip, getting the right buttons at that particular moment was but hard to call, and that no one knew for sure that lending the Lehman Brothers a hand was that very right button on behalf of the entire system. If indeed its consequential failure had the weight alluded by a section of scholars in quashing off the crisis, then, it was a mistake on behalf of the government. The foregoing notwithstanding, the downward spiral with exorbitant losses on its books of account wasn’t anything to overlook. Both ways, the decision taken was a double-edged sword with no specified guarantees

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