96. Supervisors can face a situation of "moral hazard" in relation to financial conglomerates which include unregulated entities. Moral hazard may occur when supervisors need to obtain sufficient information concerning the operations of unsupervised entities ­ financial and non­financial entities alike ­ in order to satisfy themselves that their activities cannot create material damage to the supervised entities. The difficulty is that supervisors have to gather this information in such a way as to avoid giving the impression that the activities of the unregulated entities are in some way being monitored or supervised, even if only informally. Such a belief could encourage outside observers or internal management to take risks they would not otherwise have taken in relation to the unsupervised entities; if this occurs, the supervisors' actions can be said to have created a situation of "moral hazard".