LBOs And The Reemergence Of Institutional Monitoring Of Managers

Abstract:     
The controversy surrounding the so-called LBO issue is a mystery to me because the facts reveal no evidence of a problem. Congressman Markey has said that he wasn't considering a bill to restrict, regulate, or oversee MBOs, and I encourage him to continue down that path. I recommend that Mr. Markey consider adopting for his legislative program one of the principles on which I run my life: If you never miss an airplane, you're getting to the airport too early. I urge his sub-committee not to arrive at the airport the day before the flight's departure, which, in spite of what he says, is what may happen with MBOs. Congressional legislators rarely schedule hearings with the idea that they will do nothing. We should wait to see more than a few LBOs in trouble before we start thinking about further restricting a system that has worked well.

Keywords: LBOs, MBOs, restrictions, monitoring institutions, banks, SEC

JEL Classification: G34, G38

Accepted Paper Series