Moral hazard
 Moral hazard(“Disaster”, Financial concept, Financial risk transfer)   | |
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| The "too big to fail" meme, giving an unfair advantage to entities which already have more power and assets than the "others who are NOT too big". |
Moral hazard means the awareness of big players when they take risks and loose, they will not have to take the full consequences or assume full responsibility for their behavior. When they win, however, they may pocket it.
This effect is incorporated in mathematical models for risk assessment, meaning a statistical, long term unfair advantage which translates in tilting the zero sum game of the stock markets irrevocably towards those bailed out and against the general public who has to pay for it.
An enduring statistical advantage in a zero sum game, however small, leads in the end to a the winner takes it all and the others loose it all scenario. It may take a while, but the process is irreversible with mathematical certainty, i.e. money - and therefor power - amasses at the top.
"Too big" players have other unfair advantages, like reduced taxes and insider information. Taken together these advantages translate into statistical winning scenarios ending in unlimited power to influence and coerce policy - which is another unfair commercial advantage, in other words: a self-fulfilling prophecy is created whenever risk is not evenly distributed in the market for a prolonged period of time.
