Back to Search
Start Over
CONFLICTS OF INTEREST IN SECURITISATION: ADJUSTING INCENTIVES.
- Source :
-
Journal of Corporate Law Studies . Oct2009, Vol. 9 Issue 2, p261-294. 34p. 2 Diagrams. - Publication Year :
- 2009
-
Abstract
- While many factors have contributed to the current financial turmoil, its roots can be traced back to misaligned incentives on the micro-level which resulted in numerous potential conflicts of interest. Examining the situation of investors and the various participants responsible for creating and securitising subprime mortgages, the article focuses on these conflicts of interest and provides suggestions on how to address them. While certain issues require regulatory intervention, many conflicts of interest could be solved by adjusting the incentives for market participants to induce them to voluntarily act as desired. A regulation that adjusts incentives appears to be more appropriate and more effective in the long run than heavy-handed regulatory intervention. A regulation of the financial system which is too restrictive, while hailed in times of crisis, would stifle growth and innovation, and thus ultimately damage the very institution it is meant to protect. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 14735970
- Volume :
- 9
- Issue :
- 2
- Database :
- Academic Search Index
- Journal :
- Journal of Corporate Law Studies
- Publication Type :
- Academic Journal
- Accession number :
- 44880938
- Full Text :
- https://doi.org/10.1080/14735970.2009.11421542