Meaning of moral hazard | Babel Free

Definitions

The prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk.

uncountable, usually

Equivalents

Examples

“And what about moral hazard—or concern that protecting the system, however errant the behaviour of certain bankers, will encourage more folly in the future?”

“I go to a lot of pro-market think tank events where one speaker or another blames the financial crisis and the current recession on moral hazard, as well as basically everything else that has gone wrong in the last sixty years. I'm afraid I don't see it.”

“Pyne said the uncapped scheme introduced a “moral hazard” because it encouraged employers and workers to agree to overgenerous redundancy entitlements, knowing taxpayers would foot the bill if the company failed.”

CEFR level