資本市場(chǎng)和金融機(jī)構(gòu)(9)-文庫(kù)吧資料
2025-05-21 22:51本頁(yè)面
【正文】 ary securities issued by nonFIs. Example: Investing in a well diversified portfolio vs. investing in an barely traded individual security. Thus, Investing in secondary securities ? ↑ Liquidity and ↓Price risk (↓cost, ↑returns) 5 BENEFITS: Decreased information costs and transaction costs Information costs ? Costs associated in the gathering of information due to Information Asymmetry * Adverse Selection * Moral Hazard 6 ? Adverse Selection: ? Occurs when the potential borrower who knows better his credit (bad) risk is the most likely to seek out a loan. Problem created by asymmetric information before the transaction occurs ? Moral Hazard: ? Occurs when the borrower might engage in activities that are undesirable from the lender’s point of view because they make it less likely that the loan will be paid back. Problem created by asymmetric information after the transaction occurs ? Moral Hazard creates Agency Costs ? Costs related to the risk that borrowers (managers, owners) will use the funds contrary to the interests of savers (lenders). 7 Financial Intermediaries are Better equipped in Screening out good from bad risk profiles Monitoring the entities after the transaction occurs Reducing agency costs Thus, ↓ information asymmetry ? ↓costs Transaction costs ? Economies of scale. FIs have the resource
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