The financial institutions incentives when they place financial assets with credit risk to retail investors

• Autores: Ramiro Losada
• Localización: The Spanish Review of Financial Economics, ISSN 2173-1268, Vol. 11, Nº. 1, 2013, págs. 1-12
• Idioma: inglés
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• Resumen

  • This paper analyzes the conflict of interest that exists when a financial institution issues and places a financial asset with credit risk among retail investors. Four regulatory measures are presented and analyzed in order to improve retail investors protection. Theoretically, it is shown that two of these measures, setting a price cap to the issue and an adequate enforcement could implement a first best social optimum.