The key insight here is that systemic collapse brings about its own form of moral hazard as the safe thing to do is not to try to find smart ways of accessing risk, but to make sure that when the crisis comes your bank fails in the typical way.

FORBES: Inverse Moral Hazard: A Slaughter Rule For Finance

But at the same time, we don't want the whole global economy to collapse, so that's the argument in favor of taking the moral hazard risk and just bailing them out.

NPR: Wall Street Woes: Who Gets A Bailout?

The Fed minutes from 2007 reveal that members of the Federal Open Market Committee began to struggle to find a middle ground between action that was internationalist enough to ward off a systemic financial collapse on the one hand, and Lassie-Faire enough to avoid moral hazard on the other.

FORBES: Inverse Moral Hazard: A Slaughter Rule For Finance