Assymetrical benefit/risk structure incentivises big risks
An assymetical benefit/risk structure distorts the risk tolerance of individual traders: with huge bonuses on offer for success versus (perhaps) losing your job if the bets fail.
CONTEXT(Help)
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The Global Financial Crisis »The Global Financial Crisis
Immediate triggers of the financial crisis? »Immediate triggers of the financial crisis?
Pathology in the Credit Default Swaps market »Pathology in the Credit Default Swaps market
Vast scale of rewards encouraged complicity with system »Vast scale of rewards encouraged complicity with system
Assymetrical benefit/risk structure incentivises big risks
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