Banks that are deemed too big to fail lead to adverse selection.

Name: Banks that are deemed too big to fail lead to adverse selection.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Adverse selection refers to a situation where sellers have information that buyers do not, or vice versa, about some aspect of product quality. The concept of banks being "too big to fail" primarily relates to the systemic risk they pose to the economy, not to information asymmetry between buyers and sellers.

Banks That Are Deemed Too Big to Fail Lead to Adverse