What would be actual consequences if banks (or other large companies) weren’t bailed out by the government. Would financial crashes be worse?
In: Economics
In the broadest scenario, yes it would be worse. The worst case if the financial system starts to collapse the commercial sector. No company can operate without banking in any developed country. Banks process payments from customers, payments to suppliers, provide credit for companies, provide loans for investments etc etc. Not to mention, it has to handle things like salary payments, transferring payments to pension funds, social security. So in a broad based collapse of banks, the entire economy would probably go into deep crisis.
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