What are the cost and benefits of a too big to fail policy? The benefit is shareholders of common stock in big banks are better protected against losing money; however, the cost is that it increases the incentive for adverse selection by big banks The benefit is shareholders of common stock in big banks are better protected against losing money; however, the cost is that it increases the incentive for moral hazard by big banks The benefit is that it makes a major financial disruption less likely; however, the cost is that it increases the incentive for moral hazard by big banks The benefit is that it makes a major financial disruption less likely; however, the cost is that it increases the incentive for adverse selection by big banks