Moral Hazard

What is Moral Hazard?

1.

In helping to correct a problem which originated in past poor moral judgments, creating incentives for the same problem to repeat in the future without addressing the original poor moral judgments. Since there is an expectation that one was helped once, one will be helped again.

Giving money to banks which do not reform their mortgage lending practices creates a moral hazard

See risk, consequences, precedent, insurance, compassion
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