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This volume analyzes in great detail the problem of information and risk management. Both topics are a central issue in current financial and monetary economic literature. Several recent theoretical and empirical contributions consider asymmetric information between investors and financiers as a major determinant of financial risk. In this framework, we may regard financial and banking innovation as, on one hand, policy and individual agents´ response to the problem of asymmetric information and risk management and, on the other, as a self-generated innovation process posing new challenges to policymakers in terms of information efficiency and risk control. This volume concentrates on one of the most important directions for research on banking and finance for the next decade.

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Introduction; M.Bagella, M.Baldassarri & L.Paganetto PART I: IMPERFECT INFORMATION, FINANCIAL MARKETS AND FINANCIAL INTERMEDIATION: EMPIRICAL ANALYSIS Portfolio Choice and Competition in the Banking System; G.Chiesa Financial Constraints on Investments: Evidence from Direct Revelation of Italian Firms; M.Bagella, L.Becchetti & A.Caggese Risk, Return and Adverse Selection: A Study of Optimal Behaviour Under Asymmetric Information; L.V.Williams & D.Paton Investment and Economic Instability; G.Calcagnini & E.Saltari PART II: RISK MANAGEMENT, BANKING SYSTEM AND FINANCIAL MARKETS Measuring Credit Risk in Bank Loans: Pricing and Risk Management Implications; P.L.Gilibert A Model for Measuring Financial Risks; E.Barone & A.Braghò Macroeconomic Effects of Corporate Macroeconomic Exposure: Conceptual Issues and Estimation; C.Wihlborg PART III: MONEY, FINANCE AND MACROECONOMICS Economic Growth and Evolution of Credit Market´s Structure; L.G.Deidda Political and Economic News and Lira Fluctuations: The Recent Experience: 29 March 1994-29 December 1995; M.Tivegna Size and Regional Aspects of Banking Efficiency: The Italian Puzzle; A.Giannola, C.Ricci & G.Scarfiglieri A Non-Parametric Analysis of the Italian Banking System´s Efficiency; S.Destefanis Challenges to Competitive Banking: A Theoretical Perspective; A.W.A.Boot & A.Schmeits Index

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MARIO BALDASSARRI is Professor of Economics at the University of Rome La Sapienza. He is the editor of the journal Rivista di Political Economica and of several books in the field of macro and microeconomics.

MICHELE BAGELLA is Professor of Monetary Economics at the University of Rome Tor Vergata. He has published several articles in leading foreign economic journals on corporate banking and is the author and editor of several books.

LUIGI PAGANETTO is Professor of Economics at the University of Rome Tor Vergata and vice-President of the Italian National Council of Research. He has published extensively in economic journals on issues of development and is the author and editor of several books.

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