The concept of moral hazard is closely related to the illegitimacy of debt resulting from questionable lending practices. The IMF commonly uses this term as an excuse for not providing debt relief, saying that it will only encourage irresponsible behavior by countries that will expect regular bailouts. However, in the case of IMF and other creditor lending, they create ìmoral hazardî when they lend irresponsibly in the full knowledge that they will not be held accountable for pushing bad loans. 

Instead, impoverished countries bear all consequences of ill-advised
loans and their repayment. This type of scenario frees lenders from carefully considering the loans they make, giving them no incentive to consider a loanís morality or sensibility if they are virtually guaranteed that loans will be repaid regardless of the circumstances or the cost to peopleís lives.

The clearest way to avoid moral hazard in the future is to force creditors to accept the consequences of their past bad lending. One logical consequence is that they should annul or cancel these odious and illegitimate debts.