Exploring the Effects of the Information Asymmetry on the Card-Debt Crisis

The article aimed to explore the effects of the information asymmetry on the card-debt crisis in Taiwan’s credit card market. The card-debt crisis of the credit cards broke out in Taiwan in 2005. To improve this situation, the financial authorities were forced to intervene in the market. The article employed the documents analysis and collected the related literature and statistical data to construct the information asymmetry model and the proposed hypotheses of the adverse selections and the moral hazards. The results concluded that the card-debt crisis did stem from the information asymmetry, and was alleviated by the intervention of the financial authorities.