Aug 26, 2008

Ben Bernanke on moral hazard

An expectation by financial market participants that financial crises will never occur would create its own form of moral hazard and encourage behavior that would make financial crises more, rather than less, likely.

~ Ben Bernanke, Federal Reserve chairman, “Bernanke Defends Policy of Low Rates," The Wall Street Journal, A3, August 23, 2008

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