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Problem: Briefly describe what economists mean by a "Too Big to Fail" (TBTF) bank. What policy action is a regulator forced into adopting to deal with a TBTF bank that is on the verge of failing (becoming insolvent). How can this policy response potentially encourage the increase in the size and number of TBTF banks in the future? Describe your answer and give examples.

Macroeconomics, Economics

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