If information between lender and borrower were not asymmetric, would the problem of adverse selection still exist? Could a moral hazard problem still exist? Explain. Explain how the emergence of financial intermediaries reduces the problems of adverse selection and moral hazard. Does it eliminate those problems? Observers have noted that in periods in which bank loan rates are very high, the number of "bad loans" increases appreciably. Explain how this may be related to the problem of adverse selection. What could banks do to try to reduce this problem?