Syantan Ghosal worked on the widely cited Diamond and Dybig model of bank runs to see how it might be applied in the East Asian crisis context. While it has been assumed that insurance creates no moral hazard in the model, in a crucial step forward Ghosal attempted to introduce moral hazard into this framework. Ghosal has also been studying equilibrium selection in such an environment where there are two equilibria (specifically using the concept of 'educative stability' to characterise expectation formation).
Eric Le Borgne explored the increasing importance of moral hazard questions, deemed salient since the financial crises, in the context of credit markets. He used the work of Hollmstron and Tirole to examine currency crises and credit crunches triggered by shocks to the equity of the banking system, with reference to Japan and the Russian default.