This lecture explores how information asymmetry leads to adverse selection and moral hazard, with a focus on their presence in financial markets and institutions such as insurance and credit markets. It will examine how regulations intended to solve a particular set of issues might exacerbate problems, potentially resulting in financial crises or other disastrous events. This lecture was recorded by Raghavendra Rau on 20th January 2025 at Barnard's Inn Hall, London Raghu is the Mercers School Memorial Professor of Business He is also the Sir Evelyn de Rothschild Professor of Finance at Cambridge Judge Business School.
Gresham College
