Asymmetric Information at the Platform Level: The Case of Peer-To-Peer Lending

Puriya Abbassi () and Raj Iyer ()
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Puriya Abbassi: Deutsche Bundesbank
Raj Iyer: Imperial College London

A chapter in The Palgrave Handbook of Technological Finance, 2021, pp 407-423 from Springer

Abstract: Abstract This chapter discusses the role of asymmetric information in the context of online credit markets. To that aim, it provides a comprehensive assessment of the current stand of the related literature, presents key insights into strengths, weaknesses and efficiencies of these markets in addressing ex-ante and ex-post frictions, especially as compared to traditional bank lending. We also discuss the necessary transition that online credit markets will have to make in order to play a meaningful role in the future financial system coupled with a discussion of regulatory frameworks and their impairments. The chapter provides insights on the key challenges for regulatory and legislative bodies to promote financial stability, foster responsible innovation and prevent any derailment of authorities’ efforts to achieve a more inclusive financial system.

Keywords: Asymmetric information; Online credit markets; Ex-ante screening and ex-post monitoring (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-65117-6_17

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DOI: 10.1007/978-3-030-65117-6_17

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