Friday, November 30, 2007


Fed's Poole not worried about Moral Hazard -

Why not just come out and admit they are all about moral hazard. Clearly, that's the REAL message here:


Poole-moral hazard concern won't affect Fed policy

WASHINGTON, Nov 30 (Reuters) - St. Louis Federal Reserve Bank President William Poole said on Friday he would not let concerns about "moral hazard" prevent him from backing further interest cuts in benchmark Fed interest rates.

"I would not want people in the markets to believe that I, at any rate, would be so concered about the moral hazard argument that I wouldn't possibly advocate a 25 basis point or a 50 basis point cut, or whatever might be on the table," Poole told reporters after a speech to the Cato Institute.

Moral hazard is a concept that markets might take greater risks on the belief that government policy would protect them from suffering losses.

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