Adverse selection (also usually used in German; sometimes translated as Gegenauslese und Schechtauswahl or similar)
In the financial market, participants with good creditworthiness withdraw and thus leave the field to less trustworthy partners (a situation in which financial market participation denotes a negative signal). – A situation in which one contracting party – for example: A situation in which one party to a contract – for example, the policyholder – has an informational advantage over another – the insurer – with respect to the particular facts and circumstances subject to the related contract, and in particular with respect to the risks associated with the related contract. – See factoring, unreal, financing premium, external, house bank, information, asymmetric, credit absorption, middle market bank, moral hazard, adverse selection, rating, risk, riskignorance, structural upheaval, subprime crisis, insurance uncertainties.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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