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How can commercial banks reduce occurrence

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Reference no: EM133014197

(a) In your own words, describe how the 'lemons' problem that commercial banks potentially face when making loans is an example of adverse selection?

(b) How can commercial banks reduce this occurrence? In your own words, explain via the use of an example, a loan commitment from a commercial bank's perspective. (b) How can loan commitments place a strain on commercial bank liquidity?

Reference no: EM133014197

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