The article explores how bank bailouts can lead to increased risk for governments and banks. When a financial crisis hits, governments step in to rescue struggling banks, but this can actually make things worse by raising the risk of the government defaulting on its debt. This, in turn, makes banks more vulnerable as the value of their government guarantees and bond holdings decreases. The study looked at data from European banks and governments in 2008 and found that bailouts caused sovereign credit risk to rise. The increased risk for governments also affected banks, creating a loop of risk between the two sectors.