Financial market failure

4 flashcards · Economics · by Addaneye

1. 5 types of financial market failure

   Asymmetric information Speculation and market bubbles Negative externalities Moral hazard Market rigging

2. What are moral hazards?

   When you take more risks because someone else is bearing the consequence of that risk

3. What is market rigging?

   Where firms unfairly try to control prices which distorts the price mechanism

4. Example of market rigging

   When Barclays unfairly tried to change the LIBOR to suit them