moral hazard
noun
plural moral hazards
: a situation in which a party is incentivized to risk causing harm because another party is obligated to remedy the consequences of the harm caused
Patricia A. McCoy, a professor at Boston College of Law, said that during the financial crisis of 2008, the cap on deposit insurance was lifted under the Transaction Account Guarantee Program for most banks, and the suspension remained in place until the end of 2010. … Ms. McCoy said regulators and lawmakers need to be careful about permanently raising or eliminating the deposit cap as it can encourage unnecessary risk taking. "Every time this happens it increases the potential for moral hazard going forward," Ms. McCoy said.—
Matthew Goldstein
Matthew Goldstein
specifically
: the possibility of loss to an insurance company arising from the character or circumstances of the insured
Examples of moral hazard in a Sentence
Recent Examples on the Web
The cost of this moral hazard to the U.S. is already evident.
—Charles Walldorf, The Conversation, 3 Oct. 2024
So, what would mitigate this geopolitical moral hazard?
—Charles Walldorf, The Conversation, 3 Oct. 2024
Political scientists have a term that covers this phenomenon: moral hazard.
—Charles Walldorf, The Conversation, 3 Oct. 2024
Evidence from the temporary UI boosts challenged the conventional wisdom around moral hazard.
—Oshan Jarow, Vox, 26 June 2024
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Charles Walldorf, The Conversation, 3 Oct. 2024
So, what would mitigate this geopolitical moral hazard?
—Charles Walldorf, The Conversation, 3 Oct. 2024
Political scientists have a term that covers this phenomenon: moral hazard.
—Charles Walldorf, The Conversation, 3 Oct. 2024
Evidence from the temporary UI boosts challenged the conventional wisdom around moral hazard.
—Oshan Jarow, Vox, 26 June 2024
See all Example Sentences for moral hazard
Dictionary Entries Near moral hazard
Cite this Entry
“Moral hazard.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/moral%20hazard. Accessed 30 Nov. 2024.
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