Monthly Archives - June 2017

What to regulate and how much – Bangladesh based regulator’s experience

Bangladesh Bank, Insurance Development and Regulatory Authority (IDRA), Bangladesh Security Exchange Commission (BSEC), Microcredit Regulatory Authority (MRA) are the regulatory authorities designed to regulate the overall financial system, insurance industry, capital market and micro-finance institutions respectively. These organizations were formed according to the statute and the workforce is capable but one may and should question their regulation endeavors. Being the central bank and the guardian of Bangladeshi economy, Bangladesh Bank needs to prioritize and take intervention initiatives since at times [...]

June 24, 2017 By BMBA 0 Comments Read more...

A beginner’s guide to agency problem

An agent is expected to protect the interest of the principal and an agent is paid for the services. But under the standard agency set-up it has been witnessed that most often agent do not protect the interest of the principal and they try to maximize their own interest. An agency problem is referred as the conflict of interest between the agents and principals. Agency problem with respect to a publicly listed company can be multi-layered; agency problem can incur [...]

June 19, 2017 By BMBA 0 Comments Read more...

A beginner’s guide to lemons problem & information asymmetry

In U.S.A. there is quite a vibrant market for used car. Good quality used cars are known as peaches and bad quality used cars are known as lemons. Obviously, the seller of the used car knows far better about the quality of the car than a potential buyer. Since the buyer of a used car is unsure about the actual quality of a used car, he offers an average quotation for both a good (peach) and bad car (lemon). [...]

June 12, 2017 By BMBA 0 Comments Read more...

Marriage between economics & philosophy often falls apart

To be very frank, I like and I actually adore Amartya Sen. I really appreciate his ideas on social choice theory.  I recently read his seminal books like An Uncertain Glory: The Contradictions of Modern India, Poverty and Famines: An Essay on Entitlement and Deprivation. His views on explaining the great Bengal Feminine of 1943 were exemplary. Feminine of 1943 was hardly a problem of bad production and it was basically a problem of bad allocation. Sen believes in [...]

June 5, 2017 By BMBA 0 Comments Read more...