Re: principal/agent and social conscience

[mcclintockbrent%faculty%Carthage]

Re banker capitalism in Germany:

The organizational efficiency of the banker capitalism model has come under 
question in Germany over the past year precisely because bankers haven't 
demonstrated effective control over industrial managers in a number of high 
profile corporate disasters. Metallgesellschaft AG needed a $2.1 billion bank 
bailout when it blew $1.4 billion in oil futures trading in the derivatives 
market. Metall plans to layoff 17% of the work force. Deutsche Bank AG was 
involved in the Metall case as well as the collapse of the Juergen Schneider 
AG real estate group. Fraud has been alleged in the case of both 
Metallgesellschaft and Juergen. The shoddy performance of banks such as 
Deutsche and Dresdner as principals over these agents has apparently led to 
widespread criticism and re-evaluation of the role of the supervisory boards 
of German industrial corporations which have high banker representation.

And then, as Jim Devine asks, there's the issue of who supervises the 
bankers...                                         

Cheers, Brent
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Brent McClintock                 |                               | 
Economics                        | Everything must be examined   | 
Carthage College                 | Everything must be shaken up, | 
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