Question
Your second group project is provided below. You need to write answers to each topic clearly in separate sections of the report. Explain the term
Your second group project is provided below. You need to write answers to each topic clearly in separate sections of the report.
"Explain the term too big too fail (TBTF). How is systematic risk associated with TBTF companies? If the U.S. government did not provide bailout to any TBTF firms after the financial crisis of 2007 to 2009 broke out, what would possibly happen to the U.S. and world economy? Explain.
What do you mean by the term moral hazard? Based on your knowledge in corporate governance mechanisms, identify some necessary steps that could be taken to discourage a situation giving rise to moral hazard in corporations especially from the standpoint of TBTF. Justify your answer with respect to a real situation of moral hazard, for example, the case of AIG or Lehman Brothers. Your answer should touch upon various facets of governance mechanism.
If you adopt a discriminatory approach in bailing out firms facing financial crisis, what are the criteria that you like to consider in choosing which firm or industry should be bailed out and which one should be left to go to bankrupt. What additional conditions that you want to impose when bailing out firms in financial crisis.
Identify a large firm that wasnotseverely affected by financial crisis and compare the policies and operations of this firm with those of a firm that was severely affected and bailed out by the government. What differences in policies and governance that you observe?
Find two different proposed reforms of financial markets whose purpose is to avoid future financial crises. For each proposal, identify how the changes suggested would affect the monitoring of corporate executives and improve corporate governance. Take a position in favor of the proposal that, you believe, would lead to better governance and monitoring."
Please make a report and a short presentation
Thank You
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