Economics A-Level
Moral hazard
What Moral hazard means in Economics A-Level, as defined for AQA.
Definitions of Moral hazard
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Reference: AQA
The 'too big to fail' problem where governments are forced to bail out combined banks to protect retail depositors.
A situation where one party takes excessive risks because the negative consequences are borne by another party.
Topics that use Moral hazard
- Commercial banks and investment banks (AQA A-Level)
- Imperfect information (AQA A-Level)
Related terms
- Asymmetric information
- Commercial banks
- Credit creation
- Financial intermediation
- Financial markets
- Investment banks
- Liquidity
- Liquidity vs Profitability
Using Moral hazard in the exam
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