Question
Recently, the Dutch government, through its top prosecutor, decided to press charges against ABN AMRO, for money laundering. ABN AMRO is a Dutch bank. Interestingly
Recently, the Dutch government, through its top prosecutor, decided to press charges against ABN AMRO, for money laundering. ABN AMRO is a Dutch bank. Interestingly enough, since being bailed out during the recent crisis, its stock is 56% percent owned by ... the Dutch government. The prosecutor is looking to fine ABN AMRO if the bank is indeed found to be guilty of money laundering.
a-) Suppose one of the measures the government is considering, is to replace the CEO of ABN AMRO with the minister of finance of the Netherlands. What type of asymmetric problem would be reduced, and what role would the minister of finance place in this asymmetric information problem after he takes on the dual role as CEO of ABN AMRO?
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