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Moral Hazard and its Manifestations with Regard to Financial Sphere

Publication at Faculty of Law |
2016

Abstract

The article analyses the historical and theoretical concept of "moral hazard" including the analysis of situations that can be the parts of this economic phenomenon. The moral hazard may be of a private nature, it is usually connected with the information asymmetry, not effective corporate governance and individual contracts of insurance or guarantee.

The public sphere may include the field of obligatory insurance. One of the manifestations of the public moral hazard is also the concept "too big to fail".