Fed's Lacker blames safety net for crisis

A senior Federal Reserve official has said that the implicit guarantee that the government would step in and save those institutions deemed too big to fail was a key cause of the current economic malaise.

Speaking at the Asian Banker Summit in Beijing on Monday, Lacker said: "The existence of our financial safety net actually can amplify financial instability. A discretionary safety net in particular creates incentives for too-big-to-fail institutions to pay little attention to and underprice

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