Banking · Retail Banking Risk
A bank sources home loans through Direct Selling Agents (DSAs) who are remunerated solely as a percentage of the disbursed loan amount. This arrangement primarily exposes the bank to which type of agency problem?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Moral Hazard due to information asymmetry✓
- 2Interest Rate Risk due to pricing mismatch
- 3Liquidity Risk due to cash flow mismatch
- 4Systemic Risk due to market interconnectedness
Correct answer
Moral Hazard due to information asymmetry
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