 Conflicts of Interest and Market Discipline Among Financial Service FirmsIngo Walter European Management Journal, 2004, vol. 22, issue 4, 361-376 Abstract: Very recent reports on Maxwell Communications Corporation and Enron clearly underlined a single important weakness in the behaviour of corporations and financial markets -- the exploitation of conflicts of interest. Although potential conflicts of interest are a fact of life among financial firms, they can only come to flower when competition is not perfect and when markets are not fully transparent. Since underlying market imperfections are systematic even in highly developed financial systems, causing agency problems, it is essential that the problem of conflict-of-interest exploitation is addressed through improved transparency and market discipline if public confidence in financial markets is not to be repeatedly shaken. This paper explores conflicts of interest in wholesale and retail financial markets, and in financial firms. It reviews existing regulatory measures and rating agencies as well as internal controls, and recommends strengthening of measures to prevent conflict exploitation. Keywords: Financial; conflicts; of; interest; Financial; fraud; Agency; costs; Financial; market; transparency; Financial; regulation; Rating; agencies; Corporate; governance; Chinese; walls (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eurman:v:22:y:2004:i:4:p:361-376 Ordering information: This journal article can be ordered from Access Statistics for this article European Management Journal is currently edited by Michael Haenlein More articles in European Management Journal from Elsevier |
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