What portion of the loans made by U.S. financial industry are explicitly or implicitly backed by the promise of a government bailout?
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According to a recent study conducted by researchers with the Federal Reserve Bank of Richmond, "61 percent of the liabilities of the financial system are subject to explicit or implicit protection from loss by the federal government." As explained by these researchers, "When creditors expect to be protected from losses, they will overfund risky activities, making financial crises and bailouts like those that occurred in 2007-08 more likely."
DocumentationFinancial Industry Bailouts
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