Mervyn King on Moral Hazard

Weighing up risk and rescue

“Decisions about the balance between [providing] liquidity and moral hazard is a judgment we are making almost daily.”

Why no one is to blame

“It is moral hazard that has led us to where we are. I don’t want to blame anyone. All the players have acted rationally given the positions they were in.”

Mervyn King’s Treasury statements

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One Response to Mervyn King on Moral Hazard

  1. J says:

    They were a little slow to act, but have done so convincingly since then. Buiter was almost complementary in his blog, shock horror!