State guaranty funds provide partial protection to life insurance holders in the event of an insolvency, thus creating a moral hazard problem akin to the one associated with deposit insurance in the banking industry. We find that differences across states in the financing of these government...

Purpose – The purpose of this paper is to examine the implicit subsidies received, in the form of stock market returns, from the perception that large banking organizations are too big to fail, and implications for financial regulation. Design/methodology/approach – The empirical analysis...