Behavioral biases, moral hazard, and fair regulation
(2009) Forum financier : revue bancaire et financière — Vol. 1, p. 63-71 (2009)
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- Authors
- Abstract
- Instead of focusing on short-term issues at the risk of jeopardizing the financial sustainability of public finances and impairing the functioning of financial markets over the medium term, the regulator must take structural measures aiming at giving financial institutions sufficiently strong financial incentives to stop making decisions they would not make if they were to bear the full consequences of their decisions. This is the foundation of a `fair ' financial regulation. The only way to avoid another crisis of such a magnitude is to create an environment that internalizes the negative externalities that financial intermediaries may generate.
- Affiliations
Louvain School of Management Accounting & Finance FUCaM Sciences de gestion
Citations
Petitjean, M. (2009). Behavioral biases, moral hazard, and fair regulation. Forum financier : revue bancaire et financière, 1, 63-71. https://hdl.handle.net/2078.5/250986 (Original work published 2009)