Agency Problems and Goal Conflicts

FRB of Atlanta Working Paper No. 2004-24

40 Pages Posted: 4 Jan 2005

Date Written: October 2004

Abstract

Agency theory is used to evaluate how the European Union (EU) may deal with the resolution of goal and agency conflicts in dealing with failing financial institutions. Experience in the United States suggests that the financial and regulatory structure being put in place, which relies upon country-sponsored deposit insurance funds and home country responsibility for supervision and lender-of-last-resort functions, is not likely to be robust to the failure of a large EU institution that threatens the solvency of the deposit insurance fund or that poses systemic risk. The author concludes that the EU needs a centralized and common approach to dealing with troubled institutions.

Keywords: agency problems, banking supervision and regulation, EMU, deposit insurance

JEL Classification: D72, G28, G38, H30

Suggested Citation

Eisenbeis, Robert Eisenbeis, Agency Problems and Goal Conflicts (October 2004). FRB of Atlanta Working Paper No. 2004-24. Available at SSRN: https://ssrn.com/abstract=639646 or http://dx.doi.org/10.2139/ssrn.639646

Robert Eisenbeis Eisenbeis (Contact Author)

Independent ( email )

No Address Available

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