Gino is the CEO of a financial services firm. What action should Gino take to be sure the firm avoids moral hazards?
A) He should closely monitor the behavior and performance of new employees to be certain that they have the skills they claimed to have in interviews.
B) Gino must increase hiring and develop influential relationships with government officials so that his firm will be considered "too big to fail."
C) He must create a plan in which government agencies or a consortium of other financial services firms will assume any future debts of the company.
D) Gino should define undue risk-taking, institute strict auditing of loans, and make it clear that the company will fire employees who lend recklessly.
Correct Answer:
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