Adverse Selection, Reputation and Sudden Collapses in Secondary Loan Markets

2011 ◽  
Author(s):  
Varadarajan V. Chari ◽  
Ali Shourideh ◽  
Ariel Zetlin-Jones
Keyword(s):  
Adverse Selection ◽  
Loan Markets

scholarly journals Reputation and Persistence of Adverse Selection in Secondary Loan Markets

2014 ◽  
Vol 104 (12) ◽  
pp. 4027-4070 ◽  
Author(s):  
V. V. Chari ◽  
Ali Shourideh ◽  
Ariel Zetlin-Jones
Keyword(s):  
Adverse Selection ◽  
Trade Volume ◽  
Loan Markets ◽  
Over Time ◽  
Volume Of Trade

The volume of new issuances in secondary loan markets fluctuates over time and falls when collateral values fall. We develop a model with adverse selection and reputation that is consistent with such fluctuations. Adverse selection ensures that the volume of trade falls when collateral values fall. Without reputation, the equilibrium has separation, adverse selection is quickly resolved, and trade volume is independent of collateral value. With reputation, the equilibrium has pooling and adverse selection persists over time. The equilibrium is efficient unless collateral values are low and originators' reputational levels are low. We describe policies that can implement efficient outcomes. (JEL D82, G11, G21, G28)

scholarly journals Adverse Selection, Reputation and Sudden Collapses in Secondary Loan Markets

2010 ◽  
Author(s):  
V.V. Chari ◽  
Ali Shourideh ◽  
Ariel Zetlin-Jones
Keyword(s):  
Adverse Selection ◽  
Loan Markets

AGENCY PROBLEM DALAM PENERAPAN PEMBIAYAAN AKAD MUDHARABAH PADA PERBANKAN SYARIAH

ALQALAM ◽  
2016 ◽  
Vol 33 (1) ◽  
pp. 46
Author(s):  
Aswadi Lubis
Keyword(s):  
High Risk ◽  
Asymmetric Information ◽  
Human Resources ◽  
Moral Hazard ◽  
Adverse Selection ◽  
Agency Problem ◽  
Agency Problems ◽  
Islamic Banking ◽  
The Public

The purpose of writing this article is to describe the agency problems that arise in the application of the financing with mudharabah on Islamic banking. In this article the author describes the use of the theory of financing, asymetri information, agency problems inside of financing. The conclusion of this article is that the financing is asymmetric information problems will arise, both adverse selection and moral hazard. The high risk of prospective managers (mudharib) for their moral hazard and lack of readiness of human resources in Islamic banking is among the factors that make the composition of the distribution of funds to the public more in the form of financing. The limitations that can be done to optimize this financing is among other things; owners of capital supervision (monitoring) and the customers themselves place restrictions on its actions (bonding).

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