Moral hazard - Knowledge

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interpreting the concept of “moral hazard,” there are significant differences in their understanding of its underlying causes. In economics, “moral hazard” is often attributed to the malignant development of utilitarianism. In contrast, philosophy and ethics view “moral hazard” from a broader perspective that includes the moral behaviour of individuals and society as a whole. The root cause of “moral hazard” is due to the immoral behaviour of economic agents from a social perspective. Their paper also compares and contrasts the predominantly normative conception of moral hazard found within the insurance-industry literature with the largely positive interpretations found within the economic literature. Often what is described as "moral hazard" in the insurance literature is upon closer reading, a description of the closely related concept,

1674: 45: 1530: 1661:(after the event) moral hazard. Insured parties then do not behave in a more risky manner that results in more negative consequences, but they ask an insurer to pay for more of the negative consequences from risk as insurance coverage increases. For example, without medical insurance, some may forgo medical treatment due to its costs and simply deal with substandard health. However, after medical insurance becomes available, some may ask an insurance provider to pay for the cost of medical treatment that would not have occurred otherwise. 308: 1698:. Assuming a perfectly competitive market, at equilibrium, the price will be $ 10 per unit and the individual will consume 10 units of health care. Now, consider the same individual with health insurance. Assume this health insurance makes health care free for the individual. In this case, the individual will have a price of $ 0 for the health care and thus will consume 20 units. The price will still be $ 10, but the insurance company would be the one bearing the costs. 1787:

asymmetry, where one party possesses more information than the other. For instance, within an employment relationship, an employee may engage in risky behaviour with the understanding that any negative consequences will be absorbed by their employer. To mitigate the moral hazard, firms may implement various mechanisms such as performance-based incentives, monitoring and screening to align the interests of both parties and reduce the likelihood of risky behaviour.

1489:). Because loan originators were paid on a per-mortgage basis, they had an incentive to produce as many mortgages as possible, even if they were risky. Because these institutions did not expect to hold on to the loans until maturity, they could pass on the risk to the buyer of the loans. Therefore, mortgage loan originators may have been in a situation of moral hazard, because they did not bear the costs of the risky mortgages they were underwriting. 1180: 1665:

expenses for consumers, thereby reducing the incentive for the insured to engage in excessive consumption. For example, by requiring individuals to pay a portion of their health care costs through coinsurance, copayment, or deductibles, insurance providers can give people an incentive to consume less health care and avoid making unnecessary claims. This can help reduce moral hazard by aligning the interests of the insured and the insurer.

1500:. "Too big to fail" banks may have believed they were essentially invincible to failure, thus putting them in a position of moral hazard: they could take on big risks – thus increasing their expected payoff – thinking that the federal government would bail them out in the event of a major failure. Therefore, large banks may have been in a situation of moral hazard, because they did not bear the costs of a catastrophic collapse. 1168: 1385:

the incentive for responsibility was undermined." He also wrote, "Finance companies weren't subject to the same regulatory oversight as banks. Taxpayers weren't on the hook if they went belly up , only their shareholders and other creditors were. Finance companies thus had little to discourage them from growing as aggressively as possible, even if that meant lowering or winking at traditional lending standards."

1508:(FCIC), tasked by Congress with investigating the causes of the financial crisis, cited moral hazard as a component of the crisis, arguing that many factors, including deregulation in the derivatives market in 2000, reduced federal oversight, and the potential for government bailout of "too big to fail" institutions all played a role in increasing moral hazard in the years leading up to the collapse. 1455:, i.e. the risk to banks' balance sheets arising from financial instrument valuation uncertainties. A row of regulatory documents has been issued, providing detailed prudential requirements that have many points of contact with the accounting rules and have the indirect effect of curbing the incentives for moral hazard by limiting the discretion left to banks in valuating financial instruments. 1758:

whereas lying about a fictitious health problem to defraud the insurance company would be ex post moral hazard. A second example is the case of a bank making a loan to an entrepreneur for a risky business venture. The entrepreneur becoming overly risky would be ex ante moral hazard, but willful default (wrongly claiming the venture failed when it was profitable) is ex post moral hazard.

1373:, private label securitizations grew as a share of overall mortgage securitization by purchasing and securitizing low-quality, high-risk mortgages. Agency Securitizations appear to have somewhat lowered their standards, but Agency mortgages remained considerably safer than mortgages in private-label securitizations and performed far better in terms of default rates. 1762:

latter case, after the contract has been signed there is a random draw by nature that determines the agent's type (such as his valuation for a good or his costs of effort). In the literature, two reasons have been discussed why moral hazard may imply that the first-best solution (the solution that would be attained under complete information) is not achieved.

1448:# 9 and 13 in particular) leave entities significant discretion in determining financial instrument fair value and identified this discretion as a potential source of moral hazard: "The evidence consistent with accounting discretion as contributing to moral hazard behavior indicates that (additional) prudential valuation requirements may be justified." 1282:

was the subject of renewed study by economists in the 1960s, beginning with economist Ken Arrow, and did not imply immoral behavior or fraud. Economists use this term to describe inefficiencies that can occur when risks are displaced or cannot be fully evaluated, rather than a description of the ethics or morals of the involved parties.

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In insurance markets, moral hazard occurs when the behavior of the insured party changes in a way that raises costs for the insurer since the insured party no longer bears the full costs of that behavior. Because individuals no longer bear the cost of medical services, they have an added incentive to

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There are also models that combine hidden action and hidden information. Since there is no data on unobservable variables, it is quite difficult to be able to test directly the contract-theoretic moral hazard model, however there have been some successful indirect tests with field data. Direct tests

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According to Hart and Holmström (1987), moral hazard models can be subdivided in models with hidden action and models with hidden information. In the former case, after the contract has been signed the agent chooses an action (such as an effort level) that cannot be observed by the principal. In the

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Sometimes moral hazard is so severe that it makes insurance policies impossible. Coinsurance, co-payments, and deductibles reduce the risk of moral hazard by increasing the out-of-pocket spending of consumers, which decreases their incentive to consume. These methods work by increasing out-of-pocket

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industry. Insurance companies worried that protecting their clients from risks (like fire, or car accidents) might encourage those clients to behave in riskier ways (like smoking in bed or not wearing seatbelts). This problem may inefficiently discourage those companies from protecting their clients

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involves behavior after the outcome. For instance, in the case of a health insurance company insuring an individual during a specific time period, the final health of the individual can be thought of as the outcome. The individual taking greater risks during the period would be ex-ante moral hazard

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has taken place. For example, a person with insurance against automobile theft may be less cautious about locking their car because the negative consequences of vehicle theft are now (partially) the responsibility of the insurance company. A party makes a decision about how much risk to take, while

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can occur when there is a conflict of interest between the agent and principal. If the agent has more information about his or her actions or intentions than the principal then the agent may have an incentive to act too riskily (from the viewpoint of the principal) if the interests of the agent and

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moral hazard. Insured parties then behave in a more risky manner, resulting in more negative consequences that the insurer must pay for. For example, after purchasing automobile insurance, some may tend to be less careful about locking the automobile or choose to drive more, thereby increasing the

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results from information asymmetry. If insurance companies could perfectly observe the actions of their clients, they could deny coverage to clients choosing risky actions (like smoking in bed or not wearing seat belts), allowing them to provide thorough protection against risk (fire or accidents)

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Asset managers may have had an incentive to take on more risk when managing other people's money, particularly if they were paid as a percentage of the fund's profits. If they took on more risk, they could expect higher payoff for themselves and were somewhat shielded from losses because they were

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described moral hazard as a root cause of the subprime mortgage crisis. He wrote that "the risks inherent in mortgage lending became so widely dispersed that no one was forced to worry about the quality of any single loan. As shaky mortgages were combined, diluting any problems into a larger pool,

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or immoral behavior (usually on the part of an insured party). Dembe and Boden point out, however, that prominent mathematicians who studied decision-making in the 18th century used "moral" to mean "subjective", which may cloud the true ethical significance in the term. The concept of moral hazard

1733:(which encompasses agency theory), in the adverse selection model the agent holds private information before the contract is created with the principal, whereas in the moral hazard model the agent is informed of the withheld information privately after the contract is created with the principal. 1511:

Others have argued that moral hazard could not have played a role in the financial crisis for three main reasons. First, in the event of a catastrophic failure, a government bailout would only come after major losses for the company. So even if a bailout was expected it would not prevent the firm

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of lending institutions by governments, central banks or other institutions can encourage risky lending in the future if those that take the risks come to believe that they will not have to carry the full burden of potential losses. Lending institutions need to take risks by making loans, and the

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Thus, there is no one person responsible for verifying that any one particular loan is sound, that the assets securing that one particular loan are worth what they are supposed to be worth, that the borrower responsible for making payments on the loan can read and write the language in which the

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where the risk-taking party to a transaction knows more about its intentions than the party paying the consequences of the risk and has a tendency or incentive to take on too much risk from the perspective of the party with less information. One example is a principal–agent approach (also called

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contribute to moral hazard. Mortgage securitization enables mortgage originators to pass on the risk that the mortgages they originate might default and not hold the mortgages on their balance sheets and assume the risk. In one kind of mortgage securitization, known as "agency securitizations,"

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Brokers, who were not lending their own money, pushed risk onto the lenders. Lenders, who sold mortgages soon after underwriting them, pushed risk onto investors. Investment banks bought mortgages and chopped up mortgage-backed securities into slices, some riskier than others. Investors bought

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Firstly, the agent may be risk-averse, so there is a trade-off between providing the agent with incentives and insuring the agent. Secondly, the agent may be risk-neutral but wealth-constrained and so the agent cannot make a payment to the principal and there is a trade-off between providing

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In microeconomics, agency theory analyses the relationship between the principal, the party who delegates decision making authority, and the agent, who executes the service. This theory is a key concept used to explore and resolve issues that have arisen within the relationship of agents and

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Others believe that financial bailouts of lending institutions do not encourage risky lending behavior since there is no guarantee to lending institutions that a bailout will occur. Decreased valuation of a corporation before any bailout would prevent risky, speculative business decisions by

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In the field of managerial economics, moral hazard refers to a situation in which an individual or entity engages in risky behaviour due to the knowledge that the costs associated with such behaviour will be borne by another party. This phenomenon often arises in the presence of information

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In another type of securitization, known as "private label" securitization, default risk is generally not retained by the securitizing entity. Instead, the securitizing entity passes on default risk to investors. The securitizing entity, therefore, has relatively little incentive to monitor

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Rowell and Connelly offer a detailed description of the genesis of the term moral hazard, by identifying salient changes in economic thought, which are identified within the medieval theological and probability literature. Due to the different approaches taken by economics and philosophy in

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and where the risk of each mortgage passed to the next purchaser instead of remaining with the original mortgaging institution. These mortgages and other debt instruments were put into a large pool of debt, and then shares in the pool were sold to many creditors.

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risk of theft or an accident for the insurer. After purchasing fire insurance, some may tend to be less careful about preventing fires (say, by smoking in bed or neglecting to replace the batteries in fire alarms). A further example has been identified in

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without encouraging risky behavior. However, since insurance companies cannot perfectly observe their clients' actions, they are discouraged from providing the amount of protection that would be provided in a world with perfect information.

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default risk is retained by the securitizing agency that buys the mortgages from originators. These agencies thus have an incentive to monitor originators and check loan quality. "Agency securitizations" refer to securitizations by either

2605:"EBA final draft Regulatory Technical Standards on Back-testing requirements and Profit and Loss attribution requirements under Article 325 bf(9) and 325bg (4) of Regulation(EU) No575/2013(revised Capital Requirements Regulation - CRR2" 1496:." That is, because these banks were so ingrained in the US economy, the federal government would not have allowed them to fail in order to prevent a full-scale economic crash. This belief may have been shaped by the 1998 bailout of 1512:

from taking losses. Second, there is some evidence that big banks were not expecting the crisis and thus were not expecting government bailouts, though the FCIC tried hard to contest this idea. Third, some have argued that negative

1473:, since numerous actors in the financial market may have had an incentive to increase their exposure to risk. In general, there are three ways in which moral hazard may have manifested itself in the lead up to the financial crisis: 1315:, while conceding the risk of moral hazard, defended the policy to orderly unwind Long-Term Capital by saying the world economy is at stake. Greenspan had himself been accused of creating wider moral hazard in markets by using the 1640:

ask for pricier and more elaborate medical service, which would otherwise not be necessary. In those instances, individuals have an incentive to over consume, simply because they no longer bear the full cost of medical services.

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concludes that "creditors came to believe that their loans to unsound financial institutions would be made good by the Fed – as long as the collapse of those institutions would threaten the global credit system." Fed Chair,

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According to research by Dembe and Boden, the term dates back to the 17th century and was widely used by English insurance companies by the late 19th century. Early usage of the term carried negative connotations, implying

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spending other people's money. Therefore, asset managers may have been in a situation of moral hazard, where they would take on more risk than appropriate for a given client because they did not bear the cost of failure.

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Consider a potential case of moral hazard in the health care market caused by the purchase of health insurance. Assume health care has constant marginal cost of $ 10 per unit and the individual's demand is given by

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This example shows numerically how moral hazard could occur with health insurance. The individual consumes more health care than the equilibrium quantity because they don't bear the cost of the additional care.

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It has long been recognized that a problem of moral hazard may arise when individuals engage in risk sharing under conditions such that their privately taken actions affect the probability distribution of the

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originators and maintain loan quality. "Private label" securitization refers to securitizations structured by financial institutions such as investment banks, commercial banks, and non-bank mortgage lenders.

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of moral hazard theory are feasible in laboratory settings, using the tools of experimental economics. In such a setup, Hoppe and Schmitz (2018) have corroborated central insights of moral hazard theory.

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A second type of behavior that may change is the reaction to the negative consequences of risk once they have occurred and insurance is provided to cover their costs. That may be called

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in which it is proposed that the possession of insurance undermines efforts to encourage people to integrate flood protection and resilience measures in properties exposed to flooding.

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without insurance. The green star is the market equilibrium. When the individual is insured, the marginal cost curve shifts down to 0, leading to a new equilibrium at the yellow star.

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securities and hedged against the risk of default and prepayment, pushing those risks further along. In a purely capitalist scenario, the last one holding the risk (like a game of

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from corporate governance were a more important cause, since some risky investments may have had positive expected payoff for the firm but negative expected payoff to society.

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papers that he/she signed were written, or even that the paperwork exists and is in good order. It has been suggested that this may have caused the subprime mortgage crisis.

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described moral hazard as "any situation in which one person makes the decision about how much risk to take, while someone else bears the cost if things go badly." Financial

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companies often limit the amount borrowers can spend with their cards because without such limits, borrowers may spend borrowed funds recklessly, leading to default.

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Aghion, Philippe; Fudenberg, Drew; Holden, Richard; Kunimoto, Takashi; Tercieux, Olivier (2012). "Subgame-Perfect Implementation Under Information Perturbations*".

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Moral hazard can also occur with borrowers. Borrowers may not act prudently (in the view of the lender) when they invest or spend funds recklessly. For example,

1774:. In the meantime, the moral hazard model has been extended to the cases of multiple periods and multiple tasks, both with risk-averse and risk-neutral agents. 1715:

another party bears the costs if things go badly, and the party insulated from risk behaves differently from how it would if it were fully exposed to the risk.

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will pay the associated costs. A moral hazard may occur where the actions of the risk-taking party change to the detriment of the cost-bearing party after a

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Taxpayers, depositors and other creditors often have to shoulder at least part of the burden of risky financial decisions made by lending institutions.

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incentives and minimizing the agent's limited-liability rent. Among the early contributors to the contract-theoretic literature on moral hazard were

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The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States

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Moral hazard can be divided into two types when it involves asymmetric information (or lack of verifiability) of the outcome of a random event. An

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because it does not bear the full costs of that risk. For example, when a corporation is insured, it may take on higher risk knowing that its

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executives who fail to conduct proper due diligence in their business transactions. The risk and the burdens of loss became apparent to

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avoid losses by taking over the firm. This move was criticized by former Fed Chair Paul Volcker and others as increasing moral hazard.

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in that the securitizing agency retains default risk. Under both models, investors take on only interest-rate risk, not default risk.

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model. To summarise the latter, adverse selection arises when two parties hold unequal or asymmetric information. In the instance of

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In economic theory, moral hazard is a situation in which the behavior of one party may change to the detriment of another after the

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The same underlying problem of non-observable actions also affects other contexts besides the insurance industry. It also arises in

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Schmitz, Patrick W. (2002). "On the Interplay of Hidden Action and Hidden Information in Simple Bilateral Trading Problems".

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Schmitz, Patrick W. (2005). "Allocating Control in Agency Problems with Limited Liability and Sequential Hidden Actions".

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Wu, Yan Wendy; Wilson, Linus (December 29, 2009). "Common (Stock) Sense about Risk-Shifting and Bank Bailouts". SSRN.com.

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D Rowell, LB Connelly (2012) "A history of the term 'moral hazard'" Journal of Risk and Insurance 79 (4), 1051–75

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National Commission on the Causes of the Financial and Economic Crisis in the United States (February 25, 2011).

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FINKELSTEIN, AMY; ARROW, KENNETH J.; GRUBER, JONATHAN; NEWHOUSE, JOSEPH P.; STIGLITZ, JOSEPH E. (2015).

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According to contract theory moral hazard results from a situation in which a hidden action occurs.

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Ariizumi, Hideki; McLeod, Logan (2021). "User Fees (Coinsurance, Copayment, and Deductibles)".

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Two types of behavior can change. One type is the risky behavior itself, resulting in a

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Hart, Oliver; Holmström, Bengt (1987). "The theory of contracts". In Bewley, T. (ed.).

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moral hazard is a change in behavior prior to the outcome of the random event, whereas

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Many scholars and journalists have argued that moral hazard played a role in the

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Arrow, Kenneth (1963). "Uncertainty and the Welfare Economics of Medical Care".

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Moral hazard has been studied by insurers and academics, such as in the work of

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Wilson, Linus (February 2, 2009). "Debt Overhang and Bank Bailouts". SSRN.com.

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Increases in the exposure to risk when insured, or when another bears the cost

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in the US) assumed the ultimate risk on behalf of the citizenry at large.

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riskiest loans usually have the potential for making the highest return.

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Banking regulators have taken actions to limit discretion and reduce

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Prendergast, Canice (1999). "The Provision of Incentives in Firms".

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Pauly, Mark V (1968). "The economics of moral hazard: comment".

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Annals of the American Academy of Political and Social Science

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Lazear, Edward P (2000). "Performance Pay and Productivity".

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GAO/GGD-00-67R Questions Concerning LTCM and Our Responses

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Securitization of mortgages in America started in 1983 at

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O'Hare, P.; White, I.; Connelly, A. (September 1, 2015).

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The Return of Depression Economics and the Crisis of 2008

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Holmstrom, B. (1979), "Moral hazard and observability".

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Baker, Tom (1996). "On the Genealogy of Moral hazard".

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Rogerson, William P. (1985). "Repeated Moral Hazard".

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The theory of incentives: The principal-agent model

2077:"Is Long-term Capital To Blame For Today's Crisis?" 1598:as much as the clients would like to be protected. 3087:Crawford, Vincent P.; Guasch, J. Luis (May 1983). 2325: 2184: 2103: 2978:Environment and Planning C: Government and Policy 2036:. Archived from the original on November 20, 2018 1904: 4247: 3193:Laffont, Jean-Jacques; Martimort, David (2002). 3192: 3023:Encyclopedia of Gerontology and Population Aging 2765:: CS1 maint: bot: original URL status unknown ( 2747:. Archived from the original on October 24, 2020 2696:: CS1 maint: bot: original URL status unknown ( 2054:: CS1 maint: bot: original URL status unknown ( 1492:Third, large banks may have believed they were " 1337:Many have argued that certain types of mortgage 1681:. The orange line represents the constant $ 10 3182:. Cambridge University Press. pp. 71–155. 3086: 3020: 2137: 1897:Dembe, Allard E. and Boden, Leslie I. (2000). 1677:The blue line represents the downward sloping 1436:Incentives to moral hazard in accounting rules 1259:, acts on behalf of another party, called the 1231:is a situation where an economic actor has an 3586: 3177: 2678:. Archived from the original on March 2, 2020 2375: 2071: 2030:"Long-Term Capital: It's a Short-Term Memory" 1204: 268: 3441: 2669: 2435: 2352: 2149: 2128:General Accounting Office, February 23, 2000 2093: 1951:(3). American Economic Association: 531–37. 1924:(5). American Economic Association: 941–73. 3442:Hoppe, Eva I.; Schmitz, Patrick W. (2018). 3351: 2411:"The SEC Makes Wall Street More Fraudulent" 2020: 2018: 2016: 1255:agency theory), where one party, called an 1089:International Financial Reporting Standards 1054:Separation of investment and retail banking 3593: 3579: 3474: 3093:American Journal of Agricultural Economics 2738: 2413:. Justput.com Post # 17-26. Archived from 2355:"'Moral hazard' helps shape mortgage mess" 2067: 2065: 2024: 1211: 1197: 275: 261: 3546:"What's so Moral about the Moral Hazard?" 3477:"Agency Theory: An Assessment and Review" 3459: 3410: 3365: 3328: 3283: 2997: 2924: 1609:Economists distinguish moral hazard from 1574:Learn how and when to remove this message 1459:Connection to financial crisis of 2007−08 3567:episode uses the idea as a central theme 3532: 3475:Eisenhardt, Kathleen M. (January 1989). 3207: 2779: 2534:Capital Requirements Regulation 2 (CRR2) 2243: 2183:Summers, Lawrence (September 23, 2007). 2013: 1672: 1537:This section includes a list of general 3314: 3242: 2725:from the original on December 16, 2018. 2629: 2182: 2155: 2062: 1899:"Moral Hazard: A Question of Morality?" 1781: 1250:Moral hazard can occur under a type of 4248: 3396: 3180:Advances in Economics and Econometrics 2859:Crosby was one of the founders of the 2820: 2739:Surowiecki, James (January 14, 2010). 2648:from the original on November 30, 2020 2498:Basel Committee on Banking Supervision 2477:Basel Committee on Banking Supervision 2283: 2199:from the original on December 10, 2022 1442:Basel Committee on Banking Supervision 3574: 3533:Gladwell, Malcolm (August 29, 2005). 3520:"Moral Hazard: A Tempest-Tossed Idea" 3517: 2930: 2905: 2885:Aspects of the Theory of Risk Bearing 2882: 2780:Schwarcz, Steven L. (December 2017). 2734: 2732: 2665: 2663: 2625: 2623: 2621: 2516:Capital Requirements Regulation (CRR) 2323: 2217: 2186:"Beware moral hazard fundamentalists" 1942: 1913: 1519: 3136:, M. Whinston, and J. Green (1995), 3089:"The Theory of Contracts and Agency" 2908:Essays in the Theory of Risk-Bearing 2861:National Fire Protection Association 2376:David Wighton (September 24, 2008). 1668: 1523: 3518:Dewan, Shaila (February 26, 2012). 3165:"Essays on consumer credit markets" 2887:. Finland: Yrjö Jahnssonin Säätiö. 2802:from the original on March 18, 2020 2408: 2094:John Authors (September 15, 2008). 1593:The name comes originally from the 1506:Financial Crisis Inquiry Commission 1481:Mortgage loan originators, such as 1369:During the years leading up to the 13: 3272:The Quarterly Journal of Economics 2773: 2729: 2704: 2660: 2618: 1719:principals, which is known as the 1705: 1543:it lacks sufficient corresponding 1128:Private equity and venture capital 1039:Bank for International Settlements 14: 4287: 3511: 2440:Moral Hazard': Why Risk Is Good'" 2218:Brown, Bill (November 19, 2008). 1963: 1430:Countrywide Financial Corporation 1173:Business and Economics portal 3868:Conditional Value-at-Risk (CVaR) 3481:The Academy of Management Review 1972:Moral Hazard in Health Insurance 1901:New Solutions 2000 10(3). 257–79 1528: 1356:government-sponsored enterprises 1178: 1166: 761:Base erosion and profit shifting 306: 43: 3468: 3435: 3390: 3345: 3308: 3263: 3236: 3201: 3186: 3171: 3156: 3143: 3127: 3080: 3055: 3014: 2965: 2951: 2899: 2876: 2814: 2597: 2579: 2558: 2540: 2522: 2504: 2483: 2462: 2436:Frank Ahrens (March 19, 2008). 2429: 2402: 2369: 2353:Holden Lewis (April 18, 2007). 2346: 2317: 2277: 2237: 2211: 2176: 2162:. W.W. Norton Company Limited. 2131: 1268:the principal are not aligned. 4187:Strategic financial management 3990:Asset and liability management 3354:Journal of Economic Literature 2670:Investopedia (June 25, 2019). 2112: 2096:"The Short View: Moral hazard" 2087: 2004: 1936: 1891: 521:Collateralised debt obligation 431:Bull (stock market speculator) 1: 3197:. Princeton University Press. 3163:Mark William Jenkins (2009). 3031:10.1007/978-3-030-22009-9_987 2741:"Moral Hazard and the Crisis" 1974:. Columbia University Press. 1884: 1590:, Tom Baker, and John Nyman. 1346:, a government agency, or by 867:Final consumption expenditure 4276:United States housing bubble 1945:The American Economic Review 1917:The American Economic Review 1498:Long-Term Capital Management 1304:Long-Term Capital Management 1235:to increase its exposure to 7: 3765:Operational risk management 3448:Games and Economic Behavior 1790: 1465:Financial crisis of 2007–08 10: 4292: 3937:Proportional hazards model 3888:Interest rate immunization 3317:Journal of Economic Theory 2839:10.1177/000271620502600215 2612:European Banking Authority 2591:European Banking Authority 2573:European Banking Authority 2220:"Uncle Sam as sugar daddy" 1601:Economists argue that the 1487:mortgage-backed securities 1462: 1293: 1271: 1099:Professional certification 697:Enterprise risk management 481:Offshore financial centres 18: 4220: 3977: 3838: 3803: 3755: 3667: 3619: 3612: 3606:financial risk management 3461:10.1016/j.geb.2018.02.006 3245:RAND Journal of Economics 3151:Bell Journal of Economics 1044:Financial Stability Board 3883:First-hitting-time model 3848:Arbitrage pricing theory 3399:American Economic Review 2990:10.1177/0263774x15602022 2821:Crosby, Everett (1905). 2552:EU Commission Regulation 1371:subprime mortgage crisis 733:Mergers and acquisitions 4192:Stress test (financial) 3898:Modern portfolio theory 3551:April 16, 2016, at the 3535:"The Moral Hazard Myth" 2906:Arrow, Kenneth (1971). 2883:Arrow, Kenneth (1965). 2124:April 19, 2012, at the 1873:Unintended consequences 1721:principal-agent problem 1558:more precise citations. 1265:principal–agent problem 4256:Asymmetric information 3339:10.1006/jeth.2001.2790 3025:. pp. 5332–5337. 2630:Okamoto, Karl (2009). 2409:HFM (March 16, 2009). 2305:Cite journal requires 2265:Cite journal requires 2156:Krugman, Paul (2009). 1747: 1686: 1679:marginal benefit curve 535:certificate of deposit 4230:Investment management 4132:Investment management 3858:Replicating portfolio 3634:Sovereign credit risk 3559:"Inside the Meltdown" 3421:10.1257/aer.90.5.1346 2108:on December 10, 2022. 2075:(December 29, 2008). 2028:(September 6, 2008). 1878:Wild animal suffering 1828:Information economics 1742: 1676: 1652:flood risk management 1634:lender of last resort 1471:2008 financial crisis 1440:A 2017 report by the 1252:information asymmetry 1245:financial transaction 486:Conduit and sink OFCs 4235:Mathematical finance 4167:Risk-return spectrum 4157:Mathematical finance 4112:Fundamental analysis 4045:Exchange traded fund 3629:Consumer credit risk 3555:. Press.illinois.edu 3138:Microeconomic Theory 2959:"John A. Nyman, PHD" 2910:. Chicago: Markham. 2789:Minnesota Law Review 2324:Zandi, Mark (2009). 2141:(December 1, 1998). 1803:Conflict of interest 1782:Managerial economics 1300:William J. McDonough 712:Financial statements 692:Credit rating agency 617:Repurchase agreement 21:Moral Hazard (novel) 4225:Financial economics 4182:Statistical finance 3948:Value-at-Risk (VaR) 3853:Black–Scholes model 3693:Holding period risk 2446:The Washington Post 1853:Samaritan's dilemma 1808:Economic inequality 1772:Sanford J. Grossman 1683:marginal cost curve 1148:Accounting scandals 1138:Stock market bubble 858:Government spending 815:Employment contract 767:Corporate tax haven 526:Credit default swap 19:For the novel, see 4202:Structured product 4197:Structured finance 4177:Speculative attack 3863:Cash flow matching 3826:Non-financial risk 3723:Interest rate risk 3649:Concentration risk 3525:The New York Times 3376:10.1257/jel.37.1.7 3294:10.1093/qje/qjs026 2870:2007-09-28 at the 2143:"Mr. Moral Hazard" 2034:The New York Times 1843:Perverse incentive 1818:Free rider problem 1687: 1615:hidden information 1520:Insurance industry 1354:, both for-profit 1143:Stock market crash 993:Investment banking 983:Fractional-reserve 948:Warrant of payment 897:Government revenue 820:Financial planning 738:Structured finance 240:Non-financial risk 95:Interest rate risk 67:Concentration risk 4243: 4242: 4015:Corporate finance 4010:Capital structure 3964:Cash flow at risk 3960:Liquidity at risk 3933:Survival analysis 3834: 3833: 3780:Reputational risk 3654:Credit derivative 3040:978-3-030-22008-2 2917:978-0-8410-2001-6 2823:"Fire Prevention" 2417:on April 29, 2011 2339:978-0-13-701663-1 2169:978-0-393-07101-6 2026:Lowenstein, Roger 1998:10.7312/fink16380 1980:10.7312/fink16380 1848:Risk compensation 1838:Offset hypothesis 1725:adverse selection 1669:Numerical example 1611:adverse selection 1584: 1583: 1576: 1483:Washington Mutual 1382:Moody's Analytics 1288:adverse selection 1247:has taken place. 1221: 1220: 1111: 1110: 1061: 1060: 1049:Deposit insurance 955: 954: 789: 788: 687:Corporate finance 682:Capital structure 677:Capital budgeting 612:Performance bonds 493: 492: 476:Financial centres 436:Financial planner 336:Asset (economics) 285: 284: 199:Reputational risk 4283: 4117:Growth investing 4035:Enterprise value 3985:Asset allocation 3968:Earnings at risk 3950:and extensions ( 3893:Market portfolio 3757:Operational risk 3742:Refinancing risk 3617: 3616: 3595: 3588: 3581: 3572: 3571: 3542: 3529: 3505: 3504: 3472: 3466: 3465: 3463: 3439: 3433: 3432: 3414: 3394: 3388: 3387: 3369: 3349: 3343: 3342: 3332: 3312: 3306: 3305: 3287: 3278:(4): 1843–1881. 3267: 3261: 3260: 3240: 3234: 3233: 3205: 3199: 3198: 3190: 3184: 3183: 3175: 3169: 3168: 3160: 3154: 3147: 3141: 3131: 3125: 3124: 3084: 3078: 3077: 3075: 3073: 3059: 3053: 3052: 3018: 3012: 3011: 3001: 2969: 2963: 2962: 2955: 2949: 2948: 2933:Texas Law Review 2928: 2922: 2921: 2903: 2897: 2896: 2880: 2874: 2858: 2818: 2812: 2811: 2809: 2807: 2801: 2786: 2777: 2771: 2770: 2764: 2756: 2754: 2752: 2736: 2727: 2726: 2724: 2717: 2708: 2702: 2701: 2695: 2687: 2685: 2683: 2667: 2658: 2657: 2655: 2653: 2647: 2636: 2627: 2616: 2615: 2609: 2601: 2595: 2594: 2593:. 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Archived from 2091: 2085: 2084: 2081:The New Republic 2069: 2060: 2059: 2053: 2045: 2043: 2041: 2022: 2011: 2008: 2002: 2001: 1967: 1961: 1960: 1940: 1934: 1933: 1911: 1902: 1895: 1646:before the event 1579: 1572: 1568: 1565: 1559: 1554:this section by 1545:inline citations 1532: 1531: 1524: 1397:Salomon Brothers 1213: 1206: 1199: 1185:Money portal 1183: 1182: 1181: 1171: 1170: 1121:Economic history 1083: 1082: 1016: 1015: 914:Deficit spending 888:Transfer payment 854: 853: 782:Transfer pricing 728:Leveraged buyout 702:Enterprise value 656: 655: 571:Letter of credit 556:Futures contract 389: 387:Over-the-counter 376:Foreign exchange 323: 322: 310: 287: 286: 277: 270: 263: 204:Operational risk 143:Refinancing risk 47: 28: 27: 4291: 4290: 4286: 4285: 4284: 4282: 4281: 4280: 4246: 4245: 4244: 4239: 4216: 4152:Systematic risk 4050:Expected return 4030:Economic bubble 4025:Diversification 4020:Cost of capital 3973: 3830: 3799: 3751: 3733:Volatility risk 3697:Price area risk 3663: 3639:Settlement risk 3608: 3599: 3553:Wayback Machine 3514: 3509: 3508: 3473: 3469: 3440: 3436: 3412:10.1.1.553.1082 3395: 3391: 3367:10.1.1.558.6657 3350: 3346: 3330:10.1.1.584.1856 3313: 3309: 3285:10.1.1.224.2883 3268: 3264: 3241: 3237: 3222:10.2307/1911724 3206: 3202: 3191: 3187: 3176: 3172: 3161: 3157: 3148: 3144: 3132: 3128: 3105:10.2307/1240895 3085: 3081: 3071: 3069: 3061: 3060: 3056: 3041: 3019: 3015: 2970: 2966: 2957: 2956: 2952: 2929: 2925: 2918: 2904: 2900: 2881: 2877: 2872:Wayback Machine 2819: 2815: 2805: 2803: 2799: 2784: 2778: 2774: 2758: 2757: 2750: 2748: 2737: 2730: 2722: 2715: 2709: 2705: 2689: 2688: 2681: 2679: 2668: 2661: 2651: 2649: 2645: 2639:UCLA Law Review 2634: 2628: 2619: 2607: 2603: 2602: 2598: 2585: 2584: 2580: 2568: 2564: 2563: 2559: 2546: 2545: 2541: 2528: 2527: 2523: 2510: 2509: 2505: 2493: 2489: 2488: 2484: 2472: 2468: 2467: 2463: 2450: 2448: 2434: 2430: 2420: 2418: 2407: 2403: 2393: 2391: 2374: 2370: 2360: 2358: 2351: 2347: 2340: 2328:Financial Shock 2322: 2318: 2306: 2304: 2295: 2294: 2282: 2278: 2266: 2264: 2255: 2254: 2242: 2238: 2228: 2226: 2216: 2212: 2202: 2200: 2192:Financial Times 2181: 2177: 2170: 2154: 2150: 2136: 2132: 2126:Wayback Machine 2117: 2113: 2100:Financial Times 2092: 2088: 2070: 2063: 2047: 2046: 2039: 2037: 2023: 2014: 2009: 2005: 1990: 1968: 1964: 1941: 1937: 1912: 1905: 1896: 1892: 1887: 1882: 1868:Too big to fail 1793: 1784: 1738:Bengt Holmström 1730:contract theory 1708: 1706:Economic theory 1671: 1580: 1569: 1563: 1560: 1550:Please help to 1549: 1533: 1529: 1522: 1494:too big to fail 1467: 1461: 1438: 1422:Lehman Brothers 1414:Federal Reserve 1296: 1274: 1217: 1179: 1177: 1165: 1153: 1152: 1123: 1113: 1112: 1104:Fund governance 1080: 1063: 1062: 1029:Banking license 1020:Bank regulation 1007: 978:Deposit account 967: 957: 956: 943:Non-tax revenue 939: 918: 884: 851: 841: 840: 837: 801: 791: 790: 743:Venture capital 707:Risk management 653: 643: 642: 641: 632:Syndicated loan 608: 505: 495: 494: 385: 320: 281: 162:Investment risk 120:Volatility risk 62:Settlement risk 24: 17: 12: 11: 5: 4289: 4279: 4278: 4273: 4271:Market failure 4268: 4263: 4261:Financial risk 4258: 4241: 4240: 4238: 4237: 4232: 4227: 4221: 4218: 4217: 4215: 4214: 4209: 4204: 4199: 4194: 4189: 4184: 4179: 4174: 4169: 4164: 4159: 4154: 4149: 4144: 4139: 4134: 4129: 4124: 4119: 4114: 4109: 4108: 4107: 4102: 4097: 4092: 4087: 4082: 4077: 4072: 4067: 4062: 4052: 4047: 4042: 4037: 4032: 4027: 4022: 4017: 4012: 4007: 4002: 3997: 3992: 3987: 3981: 3979: 3978:Basic concepts 3975: 3974: 3972: 3971: 3956:Margin at risk 3952:Profit at risk 3945: 3943:Tracking error 3940: 3930: 3925: 3920: 3915: 3913:Risk-free rate 3910: 3905: 3900: 3895: 3890: 3885: 3880: 3875: 3870: 3865: 3860: 3855: 3850: 3844: 3842: 3836: 3835: 3832: 3831: 3829: 3828: 3823: 3818: 3813: 3811:Execution risk 3807: 3805: 3801: 3800: 3798: 3797: 3792: 3790:Political risk 3787: 3782: 3777: 3772: 3767: 3761: 3759: 3753: 3752: 3750: 3749: 3738:Liquidity risk 3735: 3730: 3728:Inflation risk 3725: 3720: 3718:Margining risk 3715: 3710: 3708:Valuation risk 3705: 3700: 3677:Commodity risk 3673: 3671: 3665: 3664: 3662: 3661: 3659:Securitization 3656: 3651: 3646: 3641: 3636: 3631: 3625: 3623: 3614: 3610: 3609: 3602:Financial risk 3598: 3597: 3590: 3583: 3575: 3569: 3568: 3556: 3543: 3539:The New Yorker 3530: 3513: 3512:External links 3510: 3507: 3506: 3493:10.2307/258191 3467: 3434: 3405:(5): 1346–61. 3389: 3344: 3307: 3262: 3235: 3200: 3185: 3170: 3155: 3142: 3126: 3099:(2): 373–379. 3079: 3054: 3039: 3013: 2984:(6): 1175–93. 2964: 2950: 2923: 2916: 2898: 2875: 2813: 2772: 2745:The New Yorker 2728: 2703: 2659: 2617: 2596: 2578: 2557: 2539: 2521: 2503: 2482: 2461: 2428: 2401: 2368: 2357:. Bankrate.com 2345: 2338: 2316: 2307:|journal= 2276: 2267:|journal= 2236: 2210: 2175: 2168: 2148: 2139:Jeffrey Tucker 2130: 2111: 2086: 2061: 2012: 2003: 1988: 1962: 1935: 1903: 1889: 1888: 1886: 1883: 1881: 1880: 1875: 1870: 1865: 1860: 1855: 1850: 1845: 1840: 1835: 1830: 1825: 1820: 1815: 1810: 1805: 1800: 1794: 1792: 1789: 1783: 1780: 1707: 1704: 1670: 1667: 1619:hidden actions 1617:, rather than 1582: 1581: 1536: 1534: 1527: 1521: 1518: 1502: 1501: 1490: 1479: 1463:Main article: 1460: 1457: 1453:valuation risk 1437: 1434: 1410:musical chairs 1360:Western Europe 1339:securitization 1313:Alan Greenspan 1295: 1292: 1273: 1270: 1219: 1218: 1216: 1215: 1208: 1201: 1193: 1190: 1189: 1188: 1187: 1175: 1163: 1155: 1154: 1151: 1150: 1145: 1140: 1135: 1130: 1124: 1119: 1118: 1115: 1114: 1109: 1108: 1107: 1106: 1101: 1096: 1091: 1081: 1069: 1068: 1065: 1064: 1059: 1058: 1057: 1056: 1051: 1046: 1041: 1036: 1031: 1023: 1022: 1014: 1013: 1011:Lists of banks 1006: 1005: 1000: 995: 990: 985: 980: 975: 969: 968: 963: 962: 959: 958: 953: 952: 951: 950: 945: 940: 938: 937: 932: 921: 919: 917: 916: 911: 905: 900: 899: 893: 892: 891: 890: 885: 883: 882: 880:Redistribution 877: 871: 869: 861: 860: 852: 847: 846: 843: 842: 839: 838: 836: 835: 830: 824: 822: 817: 812: 802: 797: 796: 793: 792: 787: 786: 785: 784: 779: 774: 769: 764: 755: 754: 748: 747: 746: 745: 740: 735: 730: 722: 721: 717: 716: 715: 714: 709: 704: 699: 694: 689: 684: 679: 674: 669: 661: 660: 654: 649: 648: 645: 644: 640: 639: 634: 629: 624: 619: 614: 607: 606: 600: 595: 585: 584: 583: 578: 573: 568: 563: 558: 553: 548: 543: 538: 528: 523: 518: 513: 507: 506: 501: 500: 497: 496: 491: 490: 489: 488: 483: 478: 470: 469: 463: 462: 461: 460: 455: 450: 449: 448: 438: 433: 428: 426:Angel investor 420: 419: 413: 412: 411: 410: 405: 400: 395: 393:Private equity 390: 383: 378: 373: 368: 363: 358: 353: 348: 343: 338: 330: 329: 321: 316: 315: 312: 311: 303: 302: 296: 295: 283: 282: 280: 279: 272: 265: 257: 254: 253: 252: 251: 249:Stranded asset 243: 242: 236: 235: 229: 228: 227: 226: 221: 216: 214:Political risk 211: 206: 201: 193: 192: 186: 185: 184: 183: 181:Valuation risk 178: 176:Execution risk 173: 165: 164: 158: 157: 156: 155: 153:Margining risk 150: 145: 137: 136: 134:Liquidity risk 130: 129: 128: 127: 122: 117: 115:Commodity risk 112: 107: 102: 100:Inflation risk 97: 89: 88: 82: 81: 80: 79: 74: 72:Sovereign risk 69: 64: 56: 55: 49: 48: 40: 39: 37:Financial risk 33: 32: 15: 9: 6: 4: 3: 2: 4288: 4277: 4274: 4272: 4269: 4267: 4264: 4262: 4259: 4257: 4254: 4253: 4251: 4236: 4233: 4231: 4228: 4226: 4223: 4222: 4219: 4213: 4210: 4208: 4207:Systemic risk 4205: 4203: 4200: 4198: 4195: 4193: 4190: 4188: 4185: 4183: 4180: 4178: 4175: 4173: 4170: 4168: 4165: 4163: 4160: 4158: 4155: 4153: 4150: 4148: 4145: 4143: 4140: 4138: 4135: 4133: 4130: 4128: 4125: 4123: 4120: 4118: 4115: 4113: 4110: 4106: 4103: 4101: 4098: 4096: 4093: 4091: 4088: 4086: 4083: 4081: 4078: 4076: 4073: 4071: 4068: 4066: 4063: 4061: 4058: 4057: 4056: 4053: 4051: 4048: 4046: 4043: 4041: 4038: 4036: 4033: 4031: 4028: 4026: 4023: 4021: 4018: 4016: 4013: 4011: 4008: 4006: 4005:Capital asset 4003: 4001: 3998: 3996: 3995:Asset pricing 3993: 3991: 3988: 3986: 3983: 3982: 3980: 3976: 3969: 3965: 3961: 3957: 3953: 3949: 3946: 3944: 3941: 3938: 3934: 3931: 3929: 3928:Sortino ratio 3926: 3924: 3921: 3919: 3916: 3914: 3911: 3909: 3906: 3904: 3901: 3899: 3896: 3894: 3891: 3889: 3886: 3884: 3881: 3879: 3876: 3874: 3871: 3869: 3866: 3864: 3861: 3859: 3856: 3854: 3851: 3849: 3846: 3845: 3843: 3841: 3837: 3827: 3824: 3822: 3821:Systemic risk 3819: 3817: 3814: 3812: 3809: 3808: 3806: 3802: 3796: 3793: 3791: 3788: 3786: 3783: 3781: 3778: 3776: 3773: 3771: 3770:Business risk 3768: 3766: 3763: 3762: 3760: 3758: 3754: 3747: 3743: 3739: 3736: 3734: 3731: 3729: 3726: 3724: 3721: 3719: 3716: 3714: 3711: 3709: 3706: 3704: 3701: 3698: 3694: 3690: 3686: 3682: 3678: 3675: 3674: 3672: 3670: 3666: 3660: 3657: 3655: 3652: 3650: 3647: 3645: 3642: 3640: 3637: 3635: 3632: 3630: 3627: 3626: 3624: 3622: 3618: 3615: 3611: 3607: 3603: 3596: 3591: 3589: 3584: 3582: 3577: 3576: 3573: 3566: 3565: 3560: 3557: 3554: 3550: 3547: 3544: 3540: 3536: 3531: 3527: 3526: 3521: 3516: 3515: 3502: 3498: 3494: 3490: 3486: 3482: 3478: 3471: 3462: 3457: 3453: 3449: 3445: 3438: 3430: 3426: 3422: 3418: 3413: 3408: 3404: 3400: 3393: 3385: 3381: 3377: 3373: 3368: 3363: 3359: 3355: 3348: 3340: 3336: 3331: 3326: 3323:(2): 444–60. 3322: 3318: 3311: 3303: 3299: 3295: 3291: 3286: 3281: 3277: 3273: 3266: 3258: 3254: 3251:(2): 318–36. 3250: 3246: 3239: 3231: 3227: 3223: 3219: 3215: 3211: 3204: 3196: 3189: 3181: 3174: 3167:. p. 90. 3166: 3159: 3152: 3146: 3139: 3135: 3134:A. Mas-Colell 3130: 3122: 3118: 3114: 3110: 3106: 3102: 3098: 3094: 3090: 3083: 3068: 3064: 3058: 3050: 3046: 3042: 3036: 3032: 3028: 3024: 3017: 3009: 3005: 3000: 2995: 2991: 2987: 2983: 2979: 2975: 2968: 2960: 2954: 2946: 2942: 2938: 2934: 2927: 2919: 2913: 2909: 2902: 2894: 2890: 2886: 2879: 2873: 2869: 2866: 2862: 2856: 2852: 2848: 2844: 2840: 2836: 2832: 2828: 2824: 2817: 2798: 2794: 2790: 2783: 2776: 2768: 2762: 2761:cite magazine 2746: 2742: 2735: 2733: 2721: 2714: 2707: 2699: 2693: 2677: 2673: 2666: 2664: 2644: 2640: 2633: 2626: 2624: 2622: 2613: 2606: 2600: 2592: 2588: 2582: 2574: 2567: 2561: 2553: 2549: 2543: 2535: 2531: 2525: 2517: 2513: 2507: 2499: 2492: 2486: 2478: 2471: 2465: 2459: 2456: 2445: 2442: 2441: 2432: 2416: 2412: 2405: 2389: 2385: 2384: 2379: 2372: 2356: 2349: 2341: 2335: 2330: 2329: 2320: 2312: 2299: 2291: 2287: 2280: 2272: 2259: 2251: 2247: 2240: 2225: 2221: 2214: 2198: 2194: 2193: 2187: 2179: 2171: 2165: 2161: 2160: 2152: 2144: 2140: 2134: 2127: 2123: 2120: 2115: 2106: 2101: 2097: 2090: 2082: 2078: 2074: 2073:Noam Scheiber 2068: 2066: 2057: 2051: 2035: 2031: 2027: 2021: 2019: 2017: 2007: 1999: 1995: 1991: 1989:9780231538688 1985: 1981: 1977: 1973: 1966: 1958: 1954: 1950: 1946: 1939: 1931: 1927: 1923: 1919: 1918: 1910: 1908: 1900: 1894: 1890: 1879: 1876: 1874: 1871: 1869: 1866: 1864: 1863:Systemic risk 1861: 1859: 1856: 1854: 1851: 1849: 1846: 1844: 1841: 1839: 1836: 1834: 1833:Necropolitics 1831: 1829: 1826: 1824: 1821: 1819: 1816: 1814: 1811: 1809: 1806: 1804: 1801: 1799: 1796: 1795: 1788: 1779: 1775: 1773: 1769: 1763: 1759: 1756: 1752: 1746: 1741: 1739: 1734: 1732: 1731: 1726: 1722: 1716: 1713: 1703: 1699: 1697: 1693: 1684: 1680: 1675: 1666: 1662: 1660: 1655: 1653: 1648: 1647: 1641: 1637: 1635: 1631: 1627: 1622: 1620: 1616: 1612: 1607: 1604: 1599: 1596: 1591: 1589: 1588:Kenneth Arrow 1578: 1575: 1567: 1564:December 2012 1557: 1553: 1547: 1546: 1540: 1535: 1526: 1525: 1517: 1515: 1514:externalities 1509: 1507: 1504:Notably, the 1499: 1495: 1491: 1488: 1484: 1480: 1476: 1475: 1474: 1472: 1466: 1456: 1454: 1449: 1447: 1443: 1433: 1431: 1427: 1423: 1417: 1415: 1411: 1405: 1401: 1398: 1393: 1391: 1386: 1383: 1379: 1374: 1372: 1367: 1363: 1361: 1357: 1353: 1349: 1345: 1340: 1335: 1332: 1329: 1325: 1320: 1318: 1317:Greenspan put 1314: 1309: 1305: 1301: 1291: 1289: 1283: 1280: 1269: 1266: 1263:. However, a 1262: 1258: 1253: 1248: 1246: 1242: 1238: 1234: 1230: 1226: 1214: 1209: 1207: 1202: 1200: 1195: 1194: 1192: 1191: 1186: 1176: 1174: 1169: 1164: 1162: 1159: 1158: 1157: 1156: 1149: 1146: 1144: 1141: 1139: 1136: 1134: 1131: 1129: 1126: 1125: 1122: 1117: 1116: 1105: 1102: 1100: 1097: 1095: 1092: 1090: 1087: 1086: 1085: 1084: 1079: 1078:Financial law 1076: 1072: 1067: 1066: 1055: 1052: 1050: 1047: 1045: 1042: 1040: 1037: 1035: 1034:Basel Accords 1032: 1030: 1027: 1026: 1025: 1024: 1021: 1018: 1017: 1012: 1009: 1008: 1004: 1001: 999: 996: 994: 991: 989: 986: 984: 981: 979: 976: 974: 971: 970: 966: 961: 960: 949: 946: 944: 941: 936: 933: 930: 926: 923: 922: 920: 915: 912: 910: 907: 906: 904: 903: 902: 901: 898: 895: 894: 889: 886: 881: 878: 876: 873: 872: 870: 868: 865: 864: 863: 862: 859: 856: 855: 850: 845: 844: 834: 831: 829: 826: 825: 823: 821: 818: 816: 813: 811: 807: 804: 803: 800: 795: 794: 783: 780: 778: 775: 773: 772:Tax inversion 770: 768: 765: 762: 759: 758: 757: 756: 753: 750: 749: 744: 741: 739: 736: 734: 731: 729: 726: 725: 724: 723: 719: 718: 713: 710: 708: 705: 703: 700: 698: 695: 693: 690: 688: 685: 683: 680: 678: 675: 673: 670: 668: 665: 664: 663: 662: 658: 657: 652: 647: 646: 638: 637:Synthetic CDO 635: 633: 630: 628: 625: 623: 620: 618: 615: 613: 610: 609: 604: 601: 599: 596: 594: 590: 587: 586: 582: 579: 577: 574: 572: 569: 567: 564: 562: 559: 557: 554: 552: 549: 547: 544: 542: 539: 536: 532: 529: 527: 524: 522: 519: 517: 514: 512: 509: 508: 504: 499: 498: 487: 484: 482: 479: 477: 474: 473: 472: 471: 468: 465: 464: 459: 456: 454: 451: 447: 446:institutional 444: 443: 442: 439: 437: 434: 432: 429: 427: 424: 423: 422: 421: 418: 415: 414: 409: 406: 404: 401: 399: 396: 394: 391: 388: 384: 382: 379: 377: 374: 372: 369: 367: 364: 362: 359: 357: 354: 352: 351:Capital asset 349: 347: 344: 342: 339: 337: 334: 333: 332: 331: 328: 325: 324: 319: 314: 313: 309: 305: 304: 301: 298: 297: 293: 289: 288: 278: 273: 271: 266: 264: 259: 258: 256: 255: 250: 247: 246: 245: 244: 241: 238: 237: 234: 231: 230: 225: 222: 220: 217: 215: 212: 210: 207: 205: 202: 200: 197: 196: 195: 194: 191: 190:Business risk 188: 187: 182: 179: 177: 174: 172: 169: 168: 167: 166: 163: 160: 159: 154: 151: 149: 146: 144: 141: 140: 139: 138: 135: 132: 131: 126: 125:Systemic risk 123: 121: 118: 116: 113: 111: 108: 106: 105:Currency risk 103: 101: 98: 96: 93: 92: 91: 90: 87: 84: 83: 78: 75: 73: 70: 68: 65: 63: 60: 59: 58: 57: 54: 51: 50: 46: 42: 41: 38: 35: 34: 31:Categories of 30: 29: 26: 22: 4162:Moral hazard 4161: 4147:Risk of ruin 3923:Sharpe ratio 3785:Country risk 3746:Deposit risk 3644:Default risk 3562: 3538: 3523: 3487:(1): 57–74. 3484: 3480: 3470: 3451: 3447: 3437: 3402: 3398: 3392: 3357: 3353: 3347: 3320: 3316: 3310: 3275: 3271: 3265: 3248: 3244: 3238: 3216:(1): 69–76. 3213: 3210:Econometrica 3209: 3203: 3194: 3188: 3179: 3173: 3158: 3153:, pp. 74–91. 3150: 3145: 3137: 3129: 3096: 3092: 3082: 3070:. Retrieved 3067:Investopedia 3066: 3057: 3022: 3016: 2981: 2977: 2967: 2953: 2936: 2932: 2926: 2907: 2901: 2884: 2878: 2830: 2826: 2816: 2804:. Retrieved 2792: 2788: 2775: 2749:. Retrieved 2744: 2706: 2680:. Retrieved 2676:Investopedia 2675: 2650:. Retrieved 2638: 2611: 2599: 2590: 2581: 2572: 2560: 2551: 2542: 2533: 2524: 2515: 2506: 2497: 2485: 2476: 2464: 2458: 2449:. Retrieved 2447: 2443: 2439: 2431: 2419:. Retrieved 2415:the original 2404: 2392:. Retrieved 2388:the original 2381: 2371: 2359:. Retrieved 2348: 2332:. FT Press. 2327: 2319: 2298:cite journal 2279: 2258:cite journal 2239: 2229:November 30, 2227:. Retrieved 2223: 2213: 2201:. Retrieved 2190: 2178: 2158: 2151: 2133: 2114: 2105:the original 2099: 2089: 2080: 2040:November 19, 2038:. Retrieved 2033: 2006: 1971: 1965: 1948: 1944: 1938: 1921: 1915: 1893: 1798:Brinkmanship 1785: 1776: 1764: 1760: 1754: 1750: 1748: 1743: 1735: 1728: 1717: 1709: 1700: 1695: 1691: 1688: 1663: 1658: 1656: 1644: 1642: 1638: 1623: 1618: 1614: 1608: 1603:inefficiency 1600: 1592: 1585: 1570: 1561: 1542: 1510: 1503: 1468: 1450: 1439: 1418: 1406: 1402: 1394: 1387: 1375: 1368: 1364: 1336: 1333: 1324:Paul Krugman 1321: 1297: 1284: 1275: 1249: 1229:moral hazard 1228: 1222: 1074: 1003:Money supply 988:Full-reserve 973:Central bank 833:Student loan 808: / 720:Transactions 531:Time deposit 417:Participants 346:Asset growth 224:Moral hazard 223: 209:Country risk 148:Deposit risk 77:Default risk 25: 4212:Toxic asset 4172:Speculation 4105:social work 4090:engineering 3918:Risk parity 3903:Omega ratio 3816:Profit risk 3703:Equity risk 3681:Volume risk 3669:Market risk 3621:Credit risk 3454:: 544–564. 3360:(1): 7–63. 2999:10289/13906 2795:: 761–802. 2641:: 183–236. 2361:December 9, 2224:MarketWatch 2203:January 15, 1823:Game theory 1768:Oliver Hart 1740:said this: 1712:transaction 1556:introducing 1390:credit card 1352:Freddie Mac 1308:Tyler Cowen 541:Credit line 503:Instruments 398:Real estate 361:Derivatives 233:Profit risk 110:Equity risk 86:Market risk 53:Credit risk 4250:Categories 3795:Legal risk 3775:Model risk 3689:Shape risk 3685:Basis risk 3613:Categories 2718:(Report). 1885:References 1539:references 1378:Mark Zandi 1376:Economist 1348:Fannie Mae 1344:Ginnie Mae 1322:Economist 1071:Regulation 875:Operations 828:Retirement 667:Accounting 551:Derivative 458:Speculator 290:Part of a 219:Legal risk 171:Model risk 4266:Insurance 4142:Risk pool 4055:Financial 3564:Frontline 3429:0002-8282 3407:CiteSeerX 3384:0022-0515 3362:CiteSeerX 3325:CiteSeerX 3302:0033-5533 3280:CiteSeerX 3113:0002-9092 3072:March 20, 3049:244850077 3008:155016786 2945:0040-4411 2893:228221660 2855:220837165 2451:March 17, 2421:March 17, 2394:March 17, 2383:The Times 2050:cite news 1858:Specieism 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