As a result, a banker, especially if as is typical, he is not from the local region, will have difficulty getting sufficient information to offer financial products. A second concern is incentives. For example, loans are easily available only if the lender thinks he will be repaid.
It is the same as what Hawtrey calls 'psychological effect'; but that is a bad term, for it suggests something irrational, and this is entirely rational. Expectations of the future (entirely rational expectations) are based upon the data that are available in the present.