Paul Krugman

@paulkrugman ↗

Deleted No

Hibernated No

Last Checked Oct. 27, 2022

Created

Mon Oct 10 13:34:59 +0000 2022

Likes

210

Retweets

Source

Twitter Web App

View Raw Data

JSON Data

View on Twitter

Likely Available

Paul Krugman @paulkrugman

So if you're going to have a financial safety net, you also need effective financial regulation; if you don't, you can get massive moral hazard-driven losses like the S&L crisis. You see what I mean: Diamond and Dybvig made a huge range of stuff comprehensible 8/ — PolitiTweet.org

Posted Oct. 10, 2022

Preceded By

Paul Krugman @paulkrugman

Another answer is deposit insurance, which reassures people that their money is safe. However, both answers create moral hazard — a temptation for banks to take on excessive risk, and/or engage in fraud 7/ — PolitiTweet.org

Posted Oct. 10, 2022

Followed By

Paul Krugman @paulkrugman

The thing is, by the 1990s most economists thought this was a solved problem. We had deposit insurance plus bank regulation. Old-fashioned panics were supposed to be ancient history. 9/ — PolitiTweet.org

Posted Oct. 10, 2022