The Federal Reserve’s coronavirus pandemic lending efforts are unlikely to induce companies into too much risk taking in the future, a new report from the Federal Reserve Bank of New York said Thursday. “A common concern is that official sector interventions in response to the coronavirus pandemic could lead to moral hazard,” wrote Anna Kovner and Antoine Martin. They are not worried because the support now offered isn’t aimed at fixing something companies had done wrong. The pandemic was “largely due to bad luck,” they wrote, adding that “because systemic shocks are rare, official sector support is unlikely to affect…
Read More: Pandemic Market Support Shouldn’t Boost Moral Hazard