The paper argues that financial deregulation incentivized financial firms to take excessive risks and over …-expand because it turned social insurance against systemic risk into a common pool (or open) resource. The increased size and …

absence of effective regulation. That explains why with deregulation market competition could culminate in excessive risk …Drawing broadly on the literature on the political economy of the financial crisis, the paper looks at deregulation as … opportunistic profit (rent) seeking was more the cause rather than the effect of moral hazard and regulation failure. Deregulation …

The paper argues that financial deregulation incentivized financial firms to take excessive risks and over …-expand because it turned social insurance against systemic risk into a common pool (or open) resource. The increased size and …

the current crisis. Without such an inventory-taking, policymakers will run the risk of commingling crisis …

left-tail risk protection, conditional on a crisis, fully explains this Big−Small bank equity premium “fee” paid in normal …

support. This reduces their downside risk and leads to moral hazard, i.e. to incentives for these banks to assume excessive … Lender-of-Last-Resort facilities reduce moral hazard; financial sophistication, instead, appears to be conducive to risk …