Moral hazard not contained prior to crisis: Norges Bank paper
A comparison between the ongoing financial crisis and the Nordic crises of the late 1980s shows that moral hazard has not been properly contained, research published Tuesday by the Norges Bank shows.
The paper, authored by Claudio Borio, Bent Vale and Goetz von Peter, identifies three principles for successful crisis management and resolution: early recognition and intervention, broad and in-depth intervention, and the containment of moral hazard. Current policy has been comparatively strong
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