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Article: ANALYSIS: MORAL HAZARD AND RISK - I
- Article from:
- United Press International
- Article date:
- May 30, 2002
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Analysis: Moral hazard and risk - I
SKOPJE, Macedonia, May 30, 2002 (United Press International via COMTEX)
-- The reallocation and transfer of risk are booming industries. Governments,
capital markets, banks and insurance companies have all entered the
fray with ever-evolving financial instruments. Pundits praise the
virtues of the commodification and trading of risk. It allows entrepreneurs
to assume more of it, banks to get rid of it, and traders to hedge
against it. Modern risk exchanges liberated Western economies from
the tyranny of the uncertain -- they enthuse.
But this is precisely the peril of these new developments. They mass
manufacture moral hazard. They ...