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As a result of the global Covid-19 pandemic and lockdown, central banks around the world have stepped in to provide massive liquidity to the capital
As a result of the global Covid-19 pandemic and lockdown, central banks around the world have stepped in to provide massive liquidity to the capital markets. Among the key policies are to keep interest rates low or sub-zero (zero interest rate policy or ZIRP). Discuss the implication of such policies to credit risk management from the perspective of adverse selection and moral hazard.
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