1 result for tag: Liquidity


Taxpayers at Risk: The Cost of Bailouts in the Banking Industry

The recent collapse of Silicon Valley Bank (SVB) and Signature Bank has raised concerns about the impact of bank failures on taxpayers. When banks fail, there is a risk that the government will step in and provide a bailout to prevent a wider financial crisis. These bailouts are funded by taxpayers. That means that taxpayers are always at risk when the government seeks to prevent or modulate bank failures. In this article, we will explore the cost of bailouts in the banking industry and the risks that taxpayers face. The Moral Hazard of Deposit Insurance Deposit insurance is a government-sponsored, albeit institution (customer) paid insurance that ...