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How can asymmetric information problems lead to a
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- Why aren't more resources dedicated to ensuring adequate prudential oversight of the financial system, given that it's clear that such monitoring is necessary to forestall financial crises?Why aren't greater resources given to prudential regulation of the financial sector because it is obviously necessary to avert financial crises?In what way might consumer protection regulationsnegatively affect a financial intermediary’s profits?Can you think of a positive effect of such regulationson profits?
- How can the existence of asymmetric information providea rationale for government regulation of financial markets?How a decline in housing prices can trigger the subprime financial crisis in advanced economics? Explain in detail.How does risk sharing benefit both financial intermediaries and private investors?