Mr Heikensten, wrote academic papers and books, and conducted research in the area of industrial policy, labour market and foreign aid. Again, I would like to thank the three of you, for coming to discuss globalisation. Let me now proceed with the conference organisation. Professor Rogoff will be our first speaker, followed by Lucas Papademos and then Lars Heikensten. Thereafter, a discussion will follow.
Consequently, the government has an incentive to step in and bail out these banks in order to prevent a systemic meltdown. Banks that were deemed “too big to fail” therefore operated with implicit government support that was provided free of charge. Such support, however, can induce banks to engage in risky transactions.