When this moral hazard is present, credit flows rapidly into inelastically supplied assets, such as real estate. |
For example, if moral hazard is associated with deposit insurance, the greater risks banks take may demand stronger preventive techniques. |
The Federal Reserve's successive bailouts have created a huge moral hazard problem. |
The pattern of bailouts since 1995 has distorted the operation of financial markets by creating moral hazard. |
But moral hazard reduces the ability to reallocate risk among different economic agents. |
We are using IMF as shorthand for the entire grouping of moral hazard intensifiers we listed at the outset! |