Tag Archives: Seen

Seen everywhere in last U.S. crisis, moral hazard is nowhere in this one

Seen everywhere in last U.S. crisis, moral hazard is nowhere in this oneAs the U.S. Federal Reserve rolls out trillions of dollars to blunt the economic fallout of the coronavirus pandemic, there’s a notable difference to the last financial crisis: close to zero concern over “moral hazard” – the sticky business of bailing out those whose dilemma is of their own making. Back in 2007-2009, policymakers voiced repeated concern that bailing out banks and financial markets more generally would reward them for having taken imprudent risks. The Fed also faced a political backlash from its congressional overseers for what some saw as extending its reach into the fiscal sphere and, in effect, picking and choosing winners and losers.

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