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> (Yes, that way lies the potential for moral hazard) Which is to say that it is in fact costing the UK very much less than a bailout.
by devnulloverflow 7y ago
> (Yes, that way lies the potential for moral hazard)
Which is to say that it is in fact costing the UK very much less than a bailout.
- ineedasername 7y agoYes, in the long run it might cost more than the nominal sticker price of bailing them out. But losing their contribution to the economy may also cost more in the long run. I don't know which is greater, but it seems reasonable that it might be as good to have a policy of intervention. Somewhat like what is done with banks & the FDIC providing both assistance in securing customer money and at the same time a very orderly unwinding of the business, often restructuring & take over by another party. That might be better than letting it crash into insolvency at full speed. But honestly I don't know: I don't think there's an easy calculation here, and probably it's best for a country to take these things on a case by case basis. I think it's reasonable to not bail out TC, but I also think the alternative could have a rational basis as well.