Therefore, these banks also benefit from the aid of their customers. This is because their customers have no interest in dividing these groups of banks. The financial help provided by Wall Street banks and other important international banks to different customers, requires that these customers also offer their help in protecting these banks from authorities' actions. Another argument used by groups that are in the favor of too big to

" (Crawford, 2011) These comments are showing how Wellstone understood the risk that this would pose to the financial system. In eight years after making this speech, the federal government would be directly bailing out firms that were too big to fail. This is indicating how the repeal of the Glass Steagall Act allowed financial institutions to engage in excessive amounts of risk taking. It is at this point that they

Sarbanes-Oxley Over the last 13 years, the issue of fraud in publically traded corporations has been increasingly brought to the forefront. This is in response to firms engaging in behavior that is unethical and borderline illegal. The result is that investors demanded drastic action to prevent the situation from becoming worse. In response, Congress enacted the Sarbanes-Oxley Act (i.e. SOX). This required firms to make added disclosures and it closed various

Moral Hazard The term moral hazard arises out of a contractual agreement. When the terms of the contract serve as motivation for one of the parties to behave in a manner that is "contrary to the principles laid out in the agreement" (Investopedia, 2013). An example that is commonly used is when a salesperson is paid entirely on salary. The salesperson in that case has little direct incentive to perform according

Global Economy Key Player & Background As the spokesperson for an interest group representing an economic think tank, I am issuing this policy statement to detail the implications for the U.S. economy of a sovereign default in the Eurozone. As Reich notes, the financial crisis in Europe is threatening to spread to the United States. If there is a default in Greece, a panic could start in financial markets, spreading to other

Accounting and Corporate Governance How can managers fraudulently manipulate financial statements? Managers can manipulate financial statements in a variety of ways. One approach involves inflating earnings on the income statement for the current reporting period by artificially inflating revenue and gains or by deflating expenses. This approach results in making the financial condition of the company look better than its actual condition and allows the company to meet established expectations. Another approach