Who is more likely to take bigger risks

Reference no: EM131833204

Question: a. Who is more likely to take bigger risks: a trapeze artist with a safety net underneath or a trapeze artist without a safety net?

b. Who is more likely to take bigger risks with his deposits: a bank CEO in a country where there is a lender of last resort or a bank CEO in a country where there is no lender of last resort?

c. Who is more likely to spend more time searching for a well run, safe bank: a depositor living in a country with government-run deposit insurance or a depositor living in a country without government-run deposit insurance?

d. Do government-run central banks and deposit insurance both increase moral hazard problems, both decrease moral hazard problems, or do they push in different directions when it comes to moral hazard?

Reference no: EM131833204

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