Tag: moral hazard

Bank Bailouts and other Moral Hazards

Post author By Tom Spencer
Post date December 4, 2010
No Comments on Bank Bailouts and other Moral Hazards

In the previous post on Moral Hazard, we learnt that Moral Hazard refers to any situation where a person is not fully responsible for the consequences of their actions. As a result, they may take greater risks than they would have otherwise. Here are 6 examples of situations where Moral Hazards arise in practice. 1. Insurance […]

Tags bank bailouts, corporation, downturn, Economics, financial crisis, Greenspan Put, insurance, Jeffrey Miron, limited liability, moral hazard, mortgage securitisation, NINJA loans, principal-agent problem, Private Equity, TARP

Economics

Moral Hazard

Moral hazard is when they take your money and then are not responsible for what they do with it. ~ Gordon Gekko 1. Relevance of Moral Hazard THE unemployment rate in the United States is now around 9%. Over 13% of all US mortgages are either delinquent or in foreclosure (Mortgage Bankers Association). Total loses […]

Tags Economics, michael douglas, moral hazard, Paul Krugman, risk, wall street