Preventing the impact of systemic risk

Reference no: EM1375704

Mankiw discusses that if federal authorities suppose responsibility, entire financial system might well become a group of government sponsored enterprises.

Question:
A) Describe how preventing the impact of systemic risk creates a financial sector dominated by government-sponsored enterprises.
B) Evaluate the practicality and effectiveness of proposals such as: Moving towards unlimited liability; the provision of contingent capital and living wills.

Reference no: EM1375704

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