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sses 3. Indirect finance (financial intermediation) is far more important than direct finance 4. Banks are most important source of external finance 5. Financial system is among most heavily regulated sectors of economy 6. Only large, well established firms have access to securities markets 7. Collateral is prevalent feature of debt contracts 8. Debt contracts are typically extremely plicated legal documents with restrictive covenants 169。 2022 Pearson Education Canada Inc. 811 Summary: Asymmetric Information Problems and Tools to Solve Them 169。 2022 Pearson Education Canada Inc. 813 Financial Crises Factors Causing Financial Crises 1. Increase in interest rates 2. Increases in uncertainty 3. Asset market effects on balance sheets Stock market effects on worth Unanticipated deflation Cash flow effects 4. Bank panics 5. Government fiscal imbalances 169。 2022 Pearson Education Canada Inc. 86 A