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This essay shows that government credit-allocation schemes generate incentive conflicts that undermine the quality of bank supervision and eventually produce banking crisis. For political reasons, most countries establish a regulatory culture that embraces three economically contradictory...
Persistent link: https://www.econbiz.de/10012772313
Regulation consists of rulemaking and enforcement. Economic theory offers two complementary rationales for regulating … arise in multi- party relationships and that regulation introduces opportunities to impose rules that enhance the welfare of … discretion and choose actions for the common good. Agency-cost theories portray regulation as a way to raise the quality of …
Persistent link: https://www.econbiz.de/10012774887
Defects in the corporate governance of government-owned enterprises tempt opportunistic officials to breach duties of public stewardship. Corporate-governance theory suggests that incentive-based deferred compensation could intensify the force that common-law duties actually exert on regulatory...
Persistent link: https://www.econbiz.de/10012787637