1. What is the core idea behind agency theory? 2. Can you use agency theory to analyse: a. the rise and downfall of RBS; b. the mortgage debt crisis more generally? 3. Who is/are the principal(s) and who is/are the agent(s) in your analysis? Can you think of one threat that arises from the use of agency theory in developing measures aimed to prevent future banking and/or financial failures? The emergency rescue of the Royal Bank of Scotland in 2008 has cost the UK government thus the British
Disclosed principal is a principal where the identity is disclosed or revealed to a thrid party by the principal agent. The agent is not liable but the disclosed party on the third party contract is. An example of a disclosed principal is a person giving power of attorney to an agent to discuss with a bill collector how to settle the principals debts. They act on behalf of the principals best interest. 2. Undisclosed principal is when an agent acts on the behalf of the principal without the
includes the stakeholders, defined as, all constituencies with a stake in the fortunes of the company. But there is no appropriate definition for the users. The two main concepts before going into further discussion, the major one is the information asymmetry and the financial reporting decisions. The role of Information in a Market Economy is very important in order to improve operation of capital markets and to improve operation of
For how often the term ‘government’ is used, it can be difficult to understand in its entirety. At times, the government can seem like nothing more than a bother in our lives and some may question its true practicality. To understand exactly who has power and under what circumstances, as well as why government is necessary in the first place, it can be fruitful to explore it through the lens of principal agent problems and collective action problems. I will explain the scope of these problems, how
THE AGENCY What’s behind a convenient death? A group of hired assassins. CONCEPT: THE AGENCY is a professional series about hired assassins. Their moral values are power and money. Love, happiness and life are obstacles the characters must get around. UNIVERSE: THE AGENCY is an elegant and mysterious series, full of personal interests. Its tone is realistic, full of action, in which all the gestures and details have a vital importance. The series goes on through exclusive high standing spaces and
Asymmetric information is a problem which faces managers of firms everywhere. It occurs where one party to a transaction has more information than the other party to said transaction. This of course creates other problems for the managers as well. We can identify four main areas where asymmetric information causes problems. The problems caused are adverse selection, moral hazard, hiring practices and insider trading. This essay will follow the structure of firstly defining and further explaining
Moral Hazard in Banking Moral hazard is an asymmetric information problem that occurs after a transaction. In essence, a lender runs the risk that a borrower will engage in activities that are undesirable from the lender's point of view, making it less likely that the loan will be paid back. Gary H. Stern's article, "Managing Moral Hazard with Market Signals: How Regulation Should Change with Banking", addresses the moral hazard problem inherent to the financial safety net provided by the government
Although most IPOs are underpriced, the level of underpricing varies across IPOs with different issue characteristics, allocation mechanisms, underwriter reputation, and general financial market conditions. For example, the level of underpricing is reduced for larger IPOs, those underwritten by prestigious investment banks, firms with a longer operating history or more experienced insiders on the board, and those which intend to use the proceeds to repay debt. On the other hand, technology firms
Title: Strategic IPO underpricing: The UK evidence Introduction: IPO is a method for companies to raise expansion capital, however, it is also used by insiders as a tool to maximise their personal wealth. According to the theory developed by Aggarwal et al. (2002), managers underprice IPOs on purpose to raise higher profit from selling stocks at the expiration date. The IPOs that are underpriced on the first day attract the attention of the analysts therefore generate information momentum and change
he or she would be willing to pay to acquire it. The same situation holds for the buyer in a sense that it is in general unlikely to have much information about the seller’s production technology or marginal costs. Most of the time, however, this asymmetry is irrelevant (Chiappori, Jullien, Salani´e, & Salani´e, 2004).
reduce the information asymmetry between management and owner of companies (shareholders). Information asymmetry refers to a condition in which a manager (agent) has more information regarding the company than a shareholder (principal) does. Jensen and Meckling (1976) emphasize the importance of company owners (principal) handing over the management of the company to professionals (agent) who understand how to run a business. This condition results in information asymmetry between manager (agent)
its argument and understanding of the mechanisms in the brain, to change meditators into the new awaken state. This essay will reveal the evidence of mindfulness meditation making an impact on the mind. First, this essay will present the studies which found physiological functional differences in the body for those who did mindfulness meditation. Second, this essay will present the studies which found functional differences in the brain for those who perform mindfulness meditation. Third, this
Introduction The human brain plays a big role in the functioning and co-ordination of the body. The human brain is divided into three key parts namely the fore brain, midbrain and hind brain. The average weight of the human brain is about 1.5 kilograms. The cerebrum is the major part of the human brain. Below the cerebrum is the brainstem and underneath the brainstem is the cerebellum. The male and female differ in a number of ways ranging from size, genetics, location, specialisation, connections
Some do not believe that we have a left and right brain. However, A Whole New Mind: Why Right-Brainers Will Rule The Future by Daniel H. Pink explains that the left and right hemispheres of the brain control different abilities. I have learned from this book how society and the economy have shifted from the “Information Age” to a “Conceptual Age,” how the arguments of left brain theorists (L- directed) differ from those of right brain theorists (R-directed), the three A’s of abundance, automation
hybrids between both pelvic-completed and pelvic-reduced sticklebacks as well as two pelvic-complete populations. These F1 hybrids allowed for combination of the alleles of Pitx1 from pelvic-complete (FRIL, LITC) and pelvic-reduced (PAXB) populations. Brain and pelvic tissues were isolated to compare the expression of either the LITC or PAXB allele to the FRIL allele. The results supported the initial hypothesis as expression of the PAXB Pitx1 allele was greatly reduced in the pelvis but not the head
information and underlying factors that surround this disease. Stroke is a serious and life-threatening disease that mainly affects the biological functioning of the brain. It is precipitated by an occlusion in the vascular system that supports and nourishes the brain cells with oxygen and other vital minerals (Welch, 2008). With the brain deprived of the necessary nutrients to maintain its fundamental metabolic processes, it is often times altered irreversibly to the point where it affects the...
classification of Stroke, the initial assessment of patient condition involving the hypothesis based on history,physical examination and confirmation of the diagnosis with brain imaging study. This is a case report of elderly male with
Hemispheres of the Brain As I was reading the text I came upon a section that I thought to be quite fascinating. It talked about people who have a brain that functions like two different people inside of the brain. This is of course the Split-Brain Personality. As I studied this topic in more detail I found it to be quite broad and yet very detailed. I found that I needed a dictionary to be able to read all of the medical journals and books that are out there, to be able to understand what it was
processed in an infinite number of nuclei throughout both hemispheres of the brain. Thus it has been hypothesized that abnormalities of the corpus callosum (CC) are correlated with deficiencies in auditory and language processes. This article reviews studies that have tried to prove this hypothesis. Due to the homogenous nature of either process, it is too complicated to try to identify a single cause of a single structure of the brain. Studies have yet to be found of having strong evidence that the CC correlates
nights flying, having tea parties with tables of potatoes, and showing up in a public place stark naked. The question that has confused people most is why the human mind generates such a strange, captivating storyline in the midst of a time when the brain and body are thought to be resting. In truth, no one has discovered a definite, foolproof reason as to why people dream. Many theories, five of which are recapitulated in Psychology by David G. Myers, address possible, yet not entirely irrefutable