By Ciaran Hancock, includes “… He said the result of regulatory capture meant that implicit and explicit government guarantees have become part of the equity funding structure of TBTF banking organisations and deserve to be recognised as equity claims both in company law and in financial accounting.
… “Legislation is needed to clarify that managers of TBTF firms owe enforceable fiduciary duties of loyalty, competence, and care to taxpayers and to criminalise aggressive and wilful efforts to transfer value from taxpayers to shareholders and managers.”
… Mr. Kane urged the committee not to “fall into the trap of thinking of bailout expenditures as either loans or insurance. An insurance company does not double and redouble the coverage of drivers it knows to be as reckless as TBTF firms proved themselves to be during the last economic boom,” he said. … ”
Read the full article on: The Irish Times