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Oldbankerpeoplepaybackloansnot balancesheets

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Unformatted text preview: ? Copyright 2013 Copyright 2013 For Consideration: Con’t Shleifer & Vishney: “A Survey of Corporate Governance”* How do suppliers of finance control managers? Corporate governance? Is the test of the the system whether corporations continue to attract needed capital in timely fashion? Passing Test: Savings and Loan One decision stocks (Nifty­Fifty) + 1973­74 Stock Fraud – 1929; 1987; 1990s or 2000s Shleifer & USSR Copyright 2013 Copyright 2013 Thoughts on the ‘Contract’ between Financiers & Managers “Viewing the Agency Problem” – Why will banks lend unsecured? – Old Banker ­ “People pay back loans not balance sheets.” – Limits to Excess ­ Can we regulate: inefficiency ego diversion of resources theft self interest Copyright 2013 Copyright 2013 Con’t Understanding the use and abuse of managerial power – Ego, focused and directed, is an asset? – Ego, uncontrolled, is a liability? Golden Parachutes Golden Handcuffs Incentive Compensation - Responsi...
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