Soros Says Moral Hazard Looms; Volcker Says Banks Can Fail

Moral hazard in the financial system “looms larger than ever before,” even after the Dodd-Frank law gave U.S. federal agencies tools to regulate institutions that may be deemed too big to fail, said billionaire investor George Soros.

“The evidence is overwhelming that the first priority of the authorities is to prevent a market collapse, and everything else has to take second place,” Soros, chairman of Soros Fund Management LLC, said yesterday at a conference in Bretton Woods, New Hampshire.