Quaterly Journal

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In the same way, an increase in the taxes of interests can produce a effect of adverse incentive inducing enterprising to choose the projects riskiest and more lucrative (when successful). In this case the debtor is indifferent between two or more projects with different probabilities of success. For Clemenz (1986) all the debtors are identical, that it differs is that the probability of success of the projects depending on the level of effort applied for the debtor who in fact is not directly observvel for the bank. An effort increase implies in an increase of the probability of success of the project. Clemenz argues that the effort can be an inverse function the tax of interests: an increase in the tax can mean reduction in the expectation delinquent of return of the debtor what it can stimulate it to diminish it the effort applied in the project. Concluding, the tax of interests charged by the bank affects the quality of the loans, and in particular it affects the involved risks in the operations the measure that implies in the type of debtor who it will attract. A special characterization of the problem of adverse election and on the form as it intervenes with the functioning of the credit market can be understood through ' ' problem of limes' ' already boarded in a previous article. If to consider bad risks of credit as ' ' limes' ' good risks as ' ' pssegos' ' if the average tax of interests charged in the market it does not take in consideration the degree of risk of credit of each debtor, in such a way will have an incentive for risks of credit of the type ' ' pssegos' ' to leave the market for finding that the costs of the loans are high excessively for the risk presented for them.

As we observe the effect of adverse election in the credit market are real and can effectively affect the development of the credit market the measure, that the banks previously do not know the type of debtor who is accepting the taxes of interests charged for its loans. Considering the postulates of the adverse election as valid we arrive the conclusion that the banks do not make use anticipatedly of information on the behavior or the quality of the debtors much less concerning its projects. In such a way, the credit market is characterized for the involved difficulties during the process of allocation of the available resources between the presented projects. It is clearly that under adverse election the work of the banks is basic to guarantee that the best projects are only approved, contrary case the risk of loss of the resources is very great what it can imply in the bad functioning of the market as a whole. Bibliography: BEBCZUK, Ricardo N. Informacin Asimtrica in Financial Markets: Informacin y Aplicaciones. New York; Cambridge University Press, 2000.

CLEMENZ, G. Credit Markets with Asymmetric Information. New York: Verlag, 1986. COSCI, Stefania. Credit Rationing and Asymmetric Information. Vermont: Dartmouth Publishing Company Limited, 1993. JAFEE, Dwight and RUSSEL, Thomas. Imperfect Information, Uncertainty and Credit Rationing. Quaterly Journal of Economic v. 90, in the 4, P. 651-66, nov. 1976. MISHKIN, Financial Frederic S. Currencies, Banks and Markets. Rio De Janeiro: LTC, 2000. STIGLITZ, Joseph E. and WEISS, Andrew. Credit Rating in Markets with Imperfect Information. American Economic Review, v. 71, P. 393-400, June 1981. For Alexsandro Rebello Bonatto in 18 of December of 2008. alex@ venturacorporate.com.br