Investigation and evaluation of asymmetric information as a trigger of 2008 financial crisis

Asymmetric information problem, which is accepted as one of market failures, can be defined as a market player has different level of knowledge about the transaction than the other. Asymmetric information problem, as an obstacle to the effective functioning of the market, is examined with its role as a trigger and a developer in crisis times.In this study asymmetric information problem has been taken as an obstacle to the effective functioning of the market and its role as triggering and deepening the financial crisis. The objective of this study is to investigate the role of asymmetric information problem at starting and deepening stages of the 2008 Financial Crisis as well as regulations aimed to solve it. In this context the role of the asymmetric information problem in earlier crises, and measures to avoid the possible asymmetric information problem in American financial system are examined. Finally, some suggestions are made for the solution of asymmetric information problem and some of the planned regulations for future in the USA are evalued.