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The agency problem can be intensified when an agent acts on behalf of multiple principals (see multiple principal problem). [ 6 ] [ 7 ] When multiple principals have to agree on the agent's objectives, they face a collective action problem in governance, as individual principals may lobby the agent or otherwise act in their individual interests ...
The costs of paying the bonus is still an agency cost, [4] but the company will profit from paying this cost so long as the avoided residual cost (as defined above), is greater than the bonus. [21] Another key method by which agency costs are reduced is through legislative requirements that companies undertake audits of their financial ...
The multiple principal problem, also known as the common agency problem, the multiple accountabilities problem, or the problem of serving two masters, is an extension of the principal-agent problem that explains problems that can occur when one person or entity acts on behalf of multiple other persons or entities. [1]
The same underlying problem of non-observable actions also affects other contexts besides the insurance industry. It also arises in banking and finance: if a financial institution knows it is protected by a lender of last resort, it may make riskier investments than it would in the absence of the protection.
The agency created after the Great Financial Crisis to protect consumers from lending risks can’t define risk, industry says Bill Himpler March 21, 2024 at 8:13 AM
[6] [27] [29] The Office of Information and Regulatory Affairs, a division of the Office of Management and Budget, can delay agency regulations it deems unsatisfactory. [27] [33] Scholars argue that one problem of the executive branch working to reduce bureaucratic drift is that it wastes time and resources that could be spent serving constituents.
The watchdog agency would be in charge of regulating X, which Musk wants to transform into a payments platform. As he targets the CFPB, Elon Musk looks to dismantle his own potential regulator [Video]
“The problem with Xi is China has a very complex economy—part capitalist, part autocratic—and yet you now have Leninist autocrats making the most complex financial decisions. That cannot end ...