It will not. To see why, imagine you are the manager of a lottery company. Your job is similar to a banker's. You sell tickets (make loans) that have a certain probability of winning a prize (of defaulting). To ensure long-run profits, you must set a price for the tickets (charge a rate of interest) that is sufficient to pay out the lottery winnings (cover the cost of defaulting borrowers).

But suppose you were a greedy lottery company manager, concerned more with your own bonus than with your shareholders' interests. Here is a trick you might play. Offer jackpots, ticket odds and ticket prices that in effect give your customers money. For example, offer $1 tickets with a one-in-5m chance of winning a $10m prize. A one-in-5m chance of winning $10m is worth $2 . So each ticket represents a gift of $1 to its purchaser.

With such an attractive “customer value proposition” you would leave your competitors for dead. And if you limited ticket sales to, say, 1m a year, the chances are no one would win the prize. In most years you will earn $1m in ticket sales and pay nothing in prizes. When someone finally wins the $10m prize, and your company collapses, that will be a problem for shareholders and creditors; you will probably have pocketed a few nice bonuses already.