Author Question: The concept of moral hazard was publicly discussed in the context of the 2007-2008 financial crisis because (Read 38 times)

olsonmanny@gmail.com · **on:** Oct 12, 2022

The concept of moral hazard was publicly discussed in the context of the 2007-2008 financial crisis because
◦ it was feared that the U.S. government was taking advantage of its special knowledge in the financial markets.
◦ it was feared that government bailouts of financial institutions would reduce competition in financial markets.
◦ it was argued that the U.S. government should invoke moral hazard to sustain the financial sector.
◦ it was feared that government bailouts of financial institutions would encourage the institutions to continue their risky behaviour.
◦ it was claimed that moral hazard was necessary to prevent large U.S. financial institutions from going bankrupt.

dsfhkjdfaskjfdsjk · **Reply #1 on:** Oct 12, 2022

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