Moral hazard
Etymology
A 19th-century insurance term. "Hazard" comes, via Old French, from an Arabic word for a game of dice — chance itself. "Moral" here uses an older sense meaning "pertaining to conduct," not "ethical." So moral hazard is the risk arising from how people behave once they’re insured, not a judgment about their morals.
noun · /MOR-ul HAZ-urd/
The tendency to take bigger risks when you’re shielded from their consequences.
What it names
Why bailouts, insurance, and safety nets can quietly change behavior — someone else absorbs the downside, so caution slips.
Example
Guaranteeing the loans created a moral hazard: the bank had little reason to check whether borrowers could actually repay.
Related idea
The principal–agent problem is the broader family; moral hazard is the risk-taking flavor of it.