Ahnert, Toni; Kuncl, Martin - 2019
are risk-free and liquid in a secondary market, while uninsured loans are subject to adverse selection. Loan insurance … reduces the amount of lemons traded in the secondary market for uninsured loans and improves liquidity and welfare. This … regulator (i) guarantees a minimum price in the market for uninsured loans to eliminatea welfare-dominated illiquid equilibrium …