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What makes finance different?

What makes finance different?

Flowchart linking asymmetric information, moral hazard, excessive speculation, asset bubbles and market rigging to excessive risk, bank losses, credit freezes and recession

The financial sector moves money from savers to borrowers through banks, markets, insurers and payment systems. Market failure occurs when this system allocates capital inefficiently, so social welfare is not maximised.

4.4.2 Market failure in the financial sector Lesson

  1. A Level
  2. /Economics
  3. /4.4.2 Market failure in the financial sector