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| Author: | Kulpmann, M. |
| Title: | Incentives in an international bank |
| Journal: | Journal of Multinational Financial Management
2000 : SEP-DEC, VOL. 10:3/4, p. 481-494 |
| Index terms: | FINANCIAL MANAGEMENT BANKING INCENTIVES |
| Language: | eng |
| Abstract: | Margins in international banking have fallen dramatically during the last years. Therefore, banks face the pressing need to develop more suitable forms of organization and more efficient incentive schemes. In a principal agent framework this paper develops four fundamental rules. The marginal benefits from additional risk taking should be equal to its marginal cost. The top management should set position limits to the local branch managers. Competition across local branches should be used to improve incentives. |
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