Large firms not banks still too big to fail, government bailouts inefficient
The article discusses large firms that are not banks but are considered too big to fail when in financial trouble. The researchers looked at different types of resolutions for these firms, such as standard bankruptcy procedures and government bailouts. They found that only bankruptcy procedures with state funding are efficient in resolving financial distress for these firms. The study suggests that having a strong bankruptcy system in place can help mitigate the moral hazard associated with the too big to fail argument for large firms.