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- Title
FOSTERING THE BEST EXECUTION REGIME: AN EXPERIMENT ABOUT PECUNIARY SANCTIONS AND ACCOUNTABILITY IN FIDUCIARY MONEY MANAGEMENT.
- Authors
Casal, Sandro; Ploner, Matteo; Sproten, Alec N.
- Abstract
Asset management often involves a conflict of interests between investors and fund managers. A main goal of financial regulators is to identify and mitigate this conflict. This article focuses on measures that may foster protection of investors' interests. In an experiment capturing the essential elements of asset management, we find that managers' accountability does not prevent their opportunistic behavior if not backed by a threat of punishment. Further, investors inefficiently sanction managers if not completely aware of managers' choices. To effectively protect investors in financial intermediations, financial regulators should ensure both managers' accountability and a credible sanctioning system.
- Subjects
ASSET management; INVESTMENT advisors; CONFLICT of interests; LEGAL sanctions; INTERMEDIATION (Finance)
- Publication
Economic Inquiry, 2019, Vol 57, Issue 1, p600
- ISSN
0095-2583
- Publication type
Article
- DOI
10.1111/ecin.12575