The view of executives who thought they faced no moral hazard. In a market economy it
is vital that businesses should be able to fail. Without the knowledge that mismanagement
can lead to failure, executive management face no moral hazard. If risks may be taken for
short-term gain, secure in the knowledge that the public sector will step in to rescue the
business if it runs into trouble, there is an unacceptable mismatch between the risk and
reward faced by the institution and by the taxpayer.