Abstract
Information asymmetry has been a commonly existed phenomenon in banking system. This paper adopted consumer finance data from both government-owned and private- owned banks in Taiwan, variables such as numbers of effective cards, percentages of overdue loans, and revolving interest rate are used to investigate if information asymmetry phenomenon existed in Taiwan's credit card market. During the research period, Taiwan had suffered from severe crisis of credit card debt, financial supervisory organization interfered into the credit card market passively, hoping to improve the information asymmetry phenomenon of the credit card market. However, the research results show that not only information asymmetry phenomenon has not disappeared from Taiwan's credit card market, but worsen the adverse selection phenomenon and promoted moral hazard in certain degree.
Highlights
Credit card is one type of consumer finance tools that can complete the payment and transaction without cash and it is simple credit loan provided by the financial organization
The research process is divided into five stages, and the first stage was to use credit card data provided by FSH of Finance Supervisory Commission to search if information asymmetry phenomenon existed in the credit card market
Literature reading method was used as the basic source of its theory, past data in the bank statistical database of Finance Supervisory Commission were used to conduct statistical analysis and summarization, credit card related data of privately owned banks and publicly owned bank of different years were compared, and quality analysis was conducted to summarize if both of them were affected by information asymmetry and adverse selection and moral hazard were derived
Summary
Credit card is one type of consumer finance tools that can complete the payment and transaction without cash and it is simple credit loan provided by the financial organization. Taiwan’s credit card market, due the lack of business factors affecting consumer’s behavior and decision making experience of the card-issuing bank and the rough business attitude cannot be drawn to a conclusion It was model of pure pursuit of card issuance number, or maybe as clear that information asymmetry had huge influence. Shiri [9] claimed more directly that the Commission had to make aggressive intervention into the ownership structure and disclosure quality of capital market market so that the information asymmetry phenomenon in in Iran were all affected by information asymmetry domestic credit card market can be reduced, and eventually, phenomenon All these had highlighted important role the derived credit card debt crisis can be solved. It has become the target to be investigated in this paper
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