Miskin chopten -5,

hepten- a

Aned bns
An espnom i cnculyhin oinaneia rueur

United tabes
Jopan

Qpada u
Gerum
56Y ta onodao
us H
Isr.2y
Bank 1oons Non Gondh Stoek
b oun

Sater 1970 - o00

Basie foo about inoniad utbre! 8 l t

1, 5to@k» or no m o h t inpor.toyt
extercnal
tourceoo dert
sorc bwipphes
L5suin marketuble debt and equity seurih
Rnot t Jw Prima
n ue businwses
Sinonng n
operatior, s&MA ftsu
Tndirad inanse wohieh involves tha attMH
nandal itertmedi ries 15 ma tme
Tam
moro
importpt han dirad e inanu
uonioh business ,in
Laieunds dirat brtom
Lendervh in
inan ual maurket

Hncn ial Interumedidiani es, porcheu lerl

Y
banbh aro tha moh* tm port tot

etennal un d wed. to
nan a businnpl, ,

5. Tk inan aial 75tem 15

15 Omong

hevi requlated Se tons al L esonomy

G. Ony Jerege, nagutoted etzb171.
rege well-

Cb rponabon hove ea Osdess 7

e
morecets non eo tuln a e t i he
ehi Clerto 1 a rvale nt keaturre
sg debt dontnaets3 on bo-th houeho la
houehol
Oun d
bui n s y , o U y o y t

Colaterol to hoe s plodaed

property tka15 pladasd
t a lender quarrante poymert

in hevert t h berrioeTi5
nablo- to maL debt Poymsnt
nsb re

Debtdontrats toie ara

Catme ml compliewed le d
dodomenth bsisbe JsNTS
 Choptert-8

Trransao n cot:
tos T hbhuende inantialpruetow ?

invebt toak merrket

bmalll amoonA

BrroaleeT (&loeo )
: Hous nonta itermediard e reduee T
Solubon
heale Mutual bund.
Fcon omies ol
(Erpertise >

Asymmefe Tnbrort-iormation

Adveus soiton selos'on:

oruses ashen C One_

Asttuccton that
kononleoe about -the othor
foruty ins ubbjeiernt
in
on
nanhat on make
invol veel
por acaurtcfe
deeissors
deeissiors

make
Rinp0sáible -trorheWan
whon eondveting tha
 AS s an a ame ammetrie, problem had-
co beborro. he trronsoeetion
For example:
eig rubk tokenh might ba th
mof engerttotake ou
ooon beawse
knousknous thect HaCre

P+ baak.

Merta Hazarrdb; M. H aruhe ter

bcurs5. truangation
Fort ecum
ple On borrrcouu> heve btained a

oon,he may k e on
biq roa ks (ahie
ho-ve
pessibleigh ruturns b abo run a
areate risk o debous+)becawse theyo
Teate
pleyan Cuth omeone
elehh mone
Lemon rcoblem tous aAdverhe seledtion
tnbuen e inen a l trueture
Nobel
Nobe pruge inne
Gioorrqe Alero
Lemen mortket 1

Used- acr- mourrket

7Potetia bugers ol wed corth ard fraguen

ono-ble to cuhes the qualit act
cann'telleshether
Thct in thsy
tha ael11
portchiaulo wed cort ih on

un ueli on o lemon thet cuill .on hinually

gfve tham grser

ue7Overta e pruee-

mon
drives out got d C money ad
Ba
 beenomia Gggcosdth
Mone ian o

netrrie inbortmaton; sasenstunst

Lemon in
oek ard
bond morkts:sells

Debt
ea
x învestor 0-1 Hgh Return
e 2 Lous
.C-3

Tool assisf 3olve A.s prablemh

Pruvate produon an d sal o

troe ridert
insonmason.
problem
-

people usho do do not whon

OLuU whoh
poy ror inbormawbn
inbormabn
advontaee o t h normectsbn ce
tKe
t heot peop
hoepeid
poid dpn.he
trre rden problem
Suggeth ththo private Sal o
wILl be o inlonmadios
parto alseluts on to th
a
the
emon pnoblim
 o
Govertn ment Regula tibn
Fngorcmadibn-
C3) Finan tial intermo d iaton
)Oollateneul ond he
worth.

aollatoralf Proper
Collaoral repert promied o
the lender i-
emal
borrouso debaults , reduaes haConge L

eduCOS ho le de
Td verse seleahon beaauhe 1
dokaultt.
t h 4ha ere- ob a

a bonrtoore olefoult on eon,th lendar an

sell + eolotetol and e hpnoceeds T naketmake
Pdon He 4 a lossa on the land.

Heu moral
tagorid. okbect,Heheica beteen
debt and faust Contro:
Morcal Haz artd
tn equit
Ageet prebEm) frindipk eotra:Prindple
less ndoremoti on.
(Steak
holderh)
Aset
Ager Mor inbormation nonoge )

y
Toolto Solve +hPriniple - agent. prcob len

aion:
U)Produe-hon olindormas
nt-ortan a)
CaoveramentReauwlatson t invaasee. inonmatsn.
Pinoneial Intertme diadon.
u7 Debt eonreat.

Hous M. Higo îngluenu hinanaial phuetwra. In dabt

mareket

Tool
vet worth and colaterra
an d rwtriat3ve
Mont torting and Enone ment- o

Conven cunts
un desi reable
u n desi
neabl

venant to dipeourae
Coe

behaviovt