Actions and decisions of management conflict with the interests of the principal or owners. This can lead to insolvencies with far-reaching consequences even for the stability of the global financial system as a result of daring or even fraudulent actions by managers – Enron scandal 2001, WorldCom scandal 2002. – A lending institution (principal) is generally at an informational disadvantage vis-à-vis the management (agent) of a company. – See activity-shifting, balance sheet-determined, Anderson scandal, corporate governance, Peter rule. – Cf. ECB Monthly Bulletin of May 2005, p. 95 ff., Deutsche Bundesbank Monthly Bulletin of January 2012, p. 15 (principal-agent problem and the theory of the financing hierarchy).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/
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