system
Given the following post, respond as if you're commenting on Reddit:
human
Do bailouts incentivize risk taking, or other bad behavior in banks?
gpt
I think the phenomena you're referring to is called "Moral Hazard". The idea is basically that if an actor (in your case a bank) does not have to deal with the consequences of their actions, then they will engage behavior they would not have otherwise. It's commonly talked about in relation to insurance, where an individual consumes more than they otherwise would have because insurance lowers the cost of their consumption. 

As it relates to the 2008 crisis, institutions that gave out bad mortgages would package them together and sell them away as  sound investments to other economic actors, thus insulating themselves from the fallout of when those bad mortgages would inevitably go unpaid. 

You might argue that if a bank that engages in practices like this knows that they will be bailed out, they will take (or be more likely to take) risky investments because they wont have to deal with the repercussions of the market going sour.