Does an FX broker forgiving negative balances encourage moral hazard behaviour?

Author: Eamonn Sheridan | Category: News

In the wake of the GFC there has been a few billion words written on the bank bail outs and moral hazard in general.

Are FX traders now getting their own bail-outs?

Does a broker promising to forgive negative balances on accounts encourage moral hazard type behaviour and introduce more potential instability into the system?

Did some of those traders seeking forgiveness for negative balance admonish banks/institutions for getting bail outs and for the moral hazard encouragement this gave?

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