Depositors' lack of information about the quality of bank assets can lead to A) bank panics.
Bank panics refer to the simultaneous loss of confidence in banks' solvency.
This loss of confidence may drive many depositors to demand a refund of their bank deposits at the same time.
Bank panics worsen asymmetric information problems in credit markets.
A) bank panics.
B) bank booms.
C) sequencing.
D) asset transformation
Thus, depositors' lack of information about the quality of bank assets can lead to bank panics, not booms, sequencing, or asset transformation.
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