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What is moral hazard? Identify 2 regulations in the Frank-Dodd Act that affects moral hazard behavior...

What is moral hazard? Identify 2 regulations in the Frank-Dodd Act that affects moral hazard behavior of banks. Explain how each one increases or decreases the moral hazard problem. Be specific. Vague answers get less points.

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in economics moral hazard occurs when an individual has an incentive to increase their exposure to risk because they do not bear the full costs of that risk. for example, when a person is insured, they may take on higher risk knowing that their insurance will pay the associated cost.amoral hazard may occur where the actions of the detriment of the cost bearing party after a financial transaction have taken place.moralhazard can occur .frank dodd act is to promote the financial stability of the united states by improving accountability and transparency in the financial system,to end too big yto fail,to protect the american taxpayer by ending bailouts,to protect consumers from abusive financial service practices

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