Jose Miguel Artiles Caballos — How the financial system is influenced by adverse selection?

Jose Miguel Artiles Caballos — Because adverse selection increases the chance that a loan might be made to a bad credit risk, lenders may decide not to make any loans even though there are good credit risks in the market. Moral hazard occurs after the transaction. As a result, the lenders may decide not to make the loan. Visit the link to know more in details!