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Argument: Free market constrains risk-taking by letting banks fail

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Supporting quotations

" Senate Financial Reform Bill: More Bailouts & Fed Power". The New American. May 2010: "The primary argument for the American Financial Stability Act of 2010 has been that government should stop excessive risk-taking by financial firms. In a free market, firms that take lots of foolish risks go bankrupt and are removed from the economy (thus ending the threat). The threat of bankruptcy offers a strong incentive for prudent business practices."

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