8Chih-Pin Lin.

PDF general Banking in an Emerging Economy: The Conflict-of-Interest Hypothesis Chih-Pin Lin, Director, department of Business Administration, Aletheia University, mainland China consider Past research on global banking, or the perform of providing multiple pecuniary serve under the same roof, has motley findings. Some studies have plunge synergies in universal banking, duration others have found conflicts of entertain. draw on institutional-based view, I ruminate that universal banking in acclivitous economies such as Taiwan gives rise to conflicts of interest. Because market-supporting institutions in uphill economies are less developed, universal banking there are much likely to topic in conflicts of interest. Data from 211 IPO unfluctuatings furnish evidence for the hypothesis. Implications for both managers and regulators and succeeding(a) research directions are provided. Keywords: Universal banking; financial holding companies; conflicts of interest; inst itution-based view; multiple agency possible action INTRODUCTION Universal banking has been prohibited in the United States since 1933, when the Glass-Steagall dally was enacted to forbid commercial-grade banks from engaging in underwriting corporate securities, separating commercial banking, and investing banking (underwriting).

central this separation was the belief that combining commercial banking and underwriting would result in conflicts of interest (Benston, 1996). For example, when a commercial bank finds stunned that the negligence risk of a loan client unassailable has increased, it could hide secur ities for that client firm, sell the securit! ies to naï investors, and ask the firm to pay off the loan to the bank using the coming back received by issuing the securities, thus ve transferring the increased scorn risk to the naï investors (Kroszner and Rajan, 1994; Kroszner, 1996; Rajan, 1996). ve However, the Glass-Steagall Act has been gradually repealed since the late 1980s, and was last replaced by the monetary Services...If you want to get a panoptic essay, order it on our website: BestEssayCheap.com

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