Details

Autor(en) / Beteiligte

• Cosimano, Thomas F.

Titel

Financial Institutions and Trustworthy Behavior in Business Transactions

Ist Teil von

• Journal of business ethics, 2004-06, Vol.52 (2), p.179-188

Ort / Verlag

Dordrecht: Kluwer Academic Publishers

Erscheinungsjahr

2004

Quelle

PAIS Index

Beschreibungen/Notizen

• This paper uses the bankruptcy proceedings for Enron to discuss the role of financial institutions in business transactions. Using recent work by Dixit a business transaction is portrayed as a prisoners' dilemma problem between competing firms. The financial institution's role in this world is to provide information and enforce contracts so that the parties to the business deal act cooperatively. This role is recognized in the law under the heading of Fiduciary Responsibility. In the Enron case the bankruptcy examiner has argued that the Tier 1 financial institutions for Enron failed to carry out their fiduciary responsibility. As a result, the examiner has asked a fact finder to subordinate the claims of the Tier 1 financial institutions to other debt holders for Enron.