Investor Presentaiton

Proof Use "Agreeing to Disagree" argument. Since banks only distribute the trust product it is not liable. A default of trust product does not affect the information sensitivity of the assets on the balance sheet of the banks. The trust product contributes zero information sensitivity to the bank's portfolio, i.e. π/ L Bank =0. πί Investor L = 0 if they believe banks are liable. From Proposition 2, π/ Bank Since ==πt L Investor =0, investors buy and banks sells trust products.

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