The "Discipline of the Market" means that in a competitive market customers and investors deal with firms that behave well, and leave those that do not.  They avoid too much risk and flock to firms that pay the best.  Then the good actors succeed, and the bad actors go out of business naturally. If the Discipline of the Market apply to financial services, then why do we need regulation and why do we need government restrictions where the free market should apply?

Q: Explain the problems of adverse selection and moral hazard caused by asymmetric information. How can…

A: A financial institution is a corporation or person who acts as another go for different parties in…

Q: Greater role assumed by government in bailing out financial intermediaries – too big to fail…

A: Financial intermediary is referred as the institution or an individual, which act as a middleman…

Q: Regulatory reviews include an assessment of capital, asset, quality, management, earnings,…

A: Regulatory reviews:Regulatory reviews are a crucial aspect of assessing the financial health and…

Q: Ch. 14. Which one of the following is NOT an implication of market efficiency for corporate finance?…

A: market efficiency for corporate finance has Four implications

Q: What would happen to the standard of living in the United States if people lost faith in our…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Multinational management commonly do NOT fully understand: a. institutions, history and culture. b.…

A: Multinational management is all about managing a company or an entity or an enterprise in different…

Q: ith a decline in the number of publicly traded companies and the growth of other investment vehicles…

A: The high net worth individuals are those individuals which trade or invest in big amount and having…

Q: Whilst acknowledging the importance of high-quality corporate reporting, the recommendations to…

A: Making facts or information public is the process of disclosure. Making relevant information known…

Q: One party in Congress seems to believe that financial institutions are too highly regulated, and…

A: The regulations which are formed to regulate the activities of banks, investment firms and other…

Q: 3. Which of the following statements is false about the agency costs of free cash flow (FCF)?…

A: The agency costs of free cash flow (FCF) refer to the costs associated with managerial discretion…

Q: Securitization has its upside (primarily liquidity and diversification), but it has its downside as…

A: Securitization is a complex financial process where assets are bundled together and transformed into…

Q: (b) "Financial innovation sometimes brings great rewards. It can make the financial system more…

A: RELATION BETWEEN INNOVATION AND MANAGING RISK Innovation is the lifeblood of any company, but…

Q: Which of the following actions of the manager of a borrowing firm might cause a moral hazard problem…

A: Moral hazard refers to a situation in which one party is able to take risks because it does not have…

Q: True or False   One of the factors responsible for globalization of financial markets and…

A: Deregulation is the removal or decrease of regulations that impede free competition, enabling market…

Q: Which one of the following is NOT an implication of market efficiency for corporate finance?

A: Since you have posted multiple independent questions in the same request, we will solve the first…

Q: How is hiring the “next gen

A: Hiring refers to the process of selecting and appointing an individual for a job or position within…

Q: FinTech firms are facing increased regulatory oversight. A risk event at a FinTech firm can result…

A: The danger of losing money on an investment or business endeavor is referred to as financial risk.…

Q: Recession, inflation, and high interest rates are economic events that are best characterized as…

A: The question is asking us to identify the best characterization of recession, inflation, and high…

Corporate Ethics

Ethics refers to the moral values and principles that guide an individual. Corporate ethics refers to the moral behavior of a company and its employees while conducting business. Business ethics is another name for corporate ethics. Business ethics reflects the purpose of doing the business. Business ethics is the distinction between what is right and wrong in the workplace and the selection of the right set of actions. Every corporate entity follows business ethics to a large extent in order to survive and compete successfully in the market. Corporate entities that strictly adhere to business ethics gain the trust of their stakeholders and thus gain more customers. An organization follows compliance, i.e., following certain business policies, rules, procedures, and practices to deal with the problem arising from the business environment. Business ethics also ensures that they meet compliance requirements as it was connected with the activities of an organization.