A Schematic View of Government as a Regulator and Insurer of the Financial System

The purpose of this paper is to present a schematic the interactions between government as REGULATOR financial institutions and INSURER while taking into account long-term feedback relationships size scope sector level public debt resulting from crises over time. analysis concludes that at certain high expected support by government, regulator /or central bank may have stabilize situation, but there be cases where becomes socially unacceptable.