It is hard to avoid \"conflicts of interest\" in finacial markets. 1. Why is it
ID: 449134 • Letter: I
Question
It is hard to avoid "conflicts of interest" in finacial markets. 1. Why is it so important to identify a conflict of interest? 2. Discuss a specific finance example. 3. Explain how financial markets operate to minimize "conflicts of interest." E. Financial Engineering has been blamed as an important cauue of the 2008 Financial Crisis. 1. Explain the advantages of "Financial Engineering." 2. Explain the disadvantage of "Financial Engineering." 3. Provide an example of "Financial Engineering." Who benefited the most from this financial innov A. Trillions of dollars in asset value disappeared after the peak of the 2006 Asset Bubble. 1. What factors do you think were most important in the 2008 Financial Meltdown? 2. How did they impact the confidence in the financial markets? 3. What policies do you think are most important in preventing a future financial crisis? Explain. B. Financial Innovation and Liberalization contributed to the Global Financial Crisis. 1. Explain how specific examples of "Financial Innovation" negatively impacted financial markets during this period. 2. Explain how specific examples of "Financial liberalization" negatively impacted financial markets during this period. 3. How did consumer lending and bank supervisory regulation contribute to the Financial Crisis? Could it Happen Again? Explain.Explanation / Answer
D
Is it hard to avoid conflict of interest in financial markets?
This answer depends on the ethics of each person, because on financial markets you have access to information and money that an unethical person could take advantages of and will try to obtain personal benefit.
Someone with high ethical standards will not have any problems working on financial markets and keeping things ethic and legal with his customers.
Why is it important to identify a conflict of interest?
Because conflict of interest might lead to illegal circumstance, it is an unethical practices that must be avoid at all times because it creates a risk on the judgment an actions of a person.
Finance example:
When an employee awards record bonuses to himself and his executive team in the same year that he cancels the company's dividend to shareholders.
Explain how financial markets operate to minimize conflict of interests
Increase disclosure of investment analyst, credit rating analysts and auditors to reveal any interest they have in the firms
Corporate governance to control conflict of interest, ensuring that auditors are responsible to shareholders not managers
Provide adequate resources to monitor conflict of interest
Creation of best practices codes of conduct co control conflicts of interest
Please submit another question for part E, A and B
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