One other consequence of EMTALA, also not often mentioned, is that it creates a moral hazard.
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Any bailout, of course, presents a moral hazard, but there are particular reasons why public pension bailouts would create unacceptably perverse incentives.
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They create a moral hazard by rewarding executives when a company--or its share price--does well, but no corresponding penalty when the company does poorly.
Surely our sophisticated European friends would appreciate our sense of Realpolitik in ensuring that they don't make a moral hazard of our guarantee of their security.
Because otherwise there really is a moral hazard.
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"All deposit insurance is a moral hazard, and brokered deposits are a moral hazard, squared, " says Alex Pollock, a former head of the Federal Home Loan Bank of Chicago and now a fellow at the American Enterprise Institute.
The regulators failed to regulate the economy that is why you had a crisis and when you had crisis then they had to keep the financial institutions alive in order to prevent the total big round and this creates what is called a moral hazard which allows the financial institutions to indulge in excessive lending and excessive profits and excessive stimulation.
However, to inject it into unsound ones rewards the weak, penalises the strong and creates a huge moral hazard.
In that sense, not only is forgiveness of underwater mortgages a "moral hazard, " it's also cruel policy by the government for weighing on our individual ability to chase the best economic opportunities irrespective of locale.
Bunning called Bernanke a "moral hazard, " accusing him of supporting the "easy money policies of his predecessor, Alan Greenspan, " who made the cover of Time in February 1999, along with then-Treasury Secretary Robert Rubin and his successor, Lawrence H.
This apparent asymmetry has created a form of moral hazard that encourages investors to take bigger risks.
Together, the PBGC backstop and dirt-cheap premiums are a recipe for moral hazard that can only lead to trouble, while discouraging employers from making needed changes.
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What they do think though is that the subsidy which government provides to the banks has been reduced, that there has been a reduction in moral hazard.
If, on the other hand, you want to argue against government intervention, then a useful card is moral hazard : the idea that individuals will take bigger risks if they expect to be bailed out.
Active labour-market policies are a way to minimise the moral hazard that goes hand-in-hand with comprehensive insurance.
Allowing Greece to default and remain in the euro would create a precedent that would increase moral hazard.
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The second failure in insurance markets is moral hazard: a person who is insured has less incentive to act carefully than an uninsured person.
Germans still fret about moral hazard: a bail-out would mean that Greece gets away with years of irresponsible fiscal policy and could set a bad precedent for other euro delinquents.
They are a walking, talking, screaming moral hazard that's been in the American financial system for 70 years because they are exactly what I described - a private company that gets the benefit of any risks, but the government, for 70 years, has told the world - like you said, with a wink and a nudge - we're going to take care of them if anything bad happens.
"There is great reluctance in Germany to go along with such a plan as it might become a large liability and it could worsen moral hazard in the banking sector, " says Barbieri.
The theory of moral hazard is that when a company financially fails due to its own ineptness, a bail out is morally reprehensible because the action rewards a company for its own failures.
This has created an oligopoly that lulls users of their ratings into a false sense of security and spreads moral hazard: investors tend to rely on the ratings rather than making credit judgments of their own.
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And Adam, the phrase "moral hazard" has gone from a, you know, a question on the Econ 101 test to something that's in the leading paragraph of every other story on the front page of the newspaper.
Moral hazard and excessive intervention could cause a steep sell-off in Treasury and Dollar markets, causing further panic.
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The most troubling dilemma that a lawyer friend posed to me is the question of moral hazard.
Once the rules that govern the system are broken, moral hazard ceases to be an impediment, a circuit breaker.
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They argue that a generous international bankruptcy procedure would worsen the problems of moral hazard, as default became an easy option.
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