An agency problem arises when the lending decision depends on information collected by the loan officer that the lender can neither observe nor verify (Petersen, 2004). Although realigning incentives can theoretically mitigate the problem (e.g., by giving loan officers an equity stake in the ...
This paper develops and tests a model of an agency conflict that arises when investment management firms partition labor between portfolio managers who decide on the portfolio composition, and trading desks who implement trade decisions. The central result of our model is that in granting discretion ...
problem arises. There will be no formal meetings for procedures. But the larger the business, the less direct contact there will be between employees and management. Special meetings have to be held and procedures set up to say when, where, how and what circumstances the employees can talk ...
This agency problem-a key feature of the MBS market-arises when originators of mortgages that underlie the MBS no longer share in the prepayment risk of the securities, thereby increasing incentives to solicit refinancing activity. Therefore, Federal Reserve MBS holdings acquired from originators as ...
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In this case, the question arises: if the market maker, who is usually a large company, is willing to buy from you and sell to you large amounts, then is your expectation of future price change really correct?The operation of market makers is regulated by the exchange they are working ...
The other problem that arises from the employment of women is that of the working wife. It has two aspects: that of the wife who is more of a success than her husband and that of the wife who must rely heavily on her husband for help with domestic tasks. There are various ways in ...
When humans collaborate with ChatGPT in manuscript creation, with the human providing specifications and ChatGPT assuming the primary writing role, the question arises as to who should be credited as ‘the manuscript writer’. From a technical perspective, ChatGPT would be considered the manuscript ...
—as it mitigates the windfall profit that arises when an agency subsidizes projects that would have received financing absent the subsidy. This insight speaks directly to the experience of the French Agency for Ecological Transition (ADEME), a public agency monitoring innovative activities for the ...
a conflict of interest arises when someone puts their own personal gain ahead of their own duties to the corporation. One type of conflict is theagency problem, which involves