Many studies argue that asymmetric information plays a key role in lending markets. This column presents new evidence on asymmetric information and imperfect competition on the Italian lending market. An increase in adverse selection causes most of the prices in the sample to increase, most of the quantities to fall, and most of the defaults to rise. However, there is substantial heterogeneity in the response to a rise in adverse selection. Market power could be an explanation why some markets can absorb such shocks better than others.