For over a century, law firms, investment banks, accounting firms, credit rating agencies and companies seeking regular access to U.S. capital markets made large investments in their reputations. They treated customers well, and even occasionally endured losses to maintain their reputations as faithful brokers, dealers' issuers, and “gatekeepers.” This has changed. The business model among today's leading participants in the capital markets no longer treats customers as valued counterparties whose trust must be earned and nurtured, but as distant “counter-parties” to whom no duties are required. Simply put, the rough and tumble norms of the marketplace have replaced the long-standing fiduciary model in U.S. finance, and the result has been unrelenting financial scandal.
In The Death of Corporate Reputation, pioneering corporate law and governance expert and Yale professor Jonathan Macey describes the disastrous transformation from the old reputational model to the existing laissez faire model in finance. Macey convincingly argues that the change came as a result of two factors: (1) the growth of reliance on regulation rather than reputation as the primary mechanism for protecting customers and (2) growing regulatory complexity, which made technical expertise rather than reputation the #1 criterion customers use in choosing new business partners. After identifying the heart of the problem, he offers a path forward -- and a true “silver lining” in the age of Madoff.
Table of Contents
Chapter 1: The Way Things Used to Work: Reputational Theory and Its Demise 7
Chapter 2: Thriving the New Way: With Little or No Reputation--The Goldman Sachs Story 29
Chapter 3: The Way Things Used to Be: When Reputation Was Critical to Survival 55
Chapter 4: Individual Reputation Unhinged from the Firm: Hardly Anybody Goes Down with the Ship 83
Chapter 5: Proof in the Pudding: Michael Milken, Junk Bonds, and the Decline of Drexel and Nobody Else 103
Chapter 6: The New, Post-Reputation Wall Street: Accounting Firms 123
Chapter 7: The New, Post-Reputation Wall Street: Law Firms 149
Chapter 8: The New, Post-Reputation Wall Street: Credit Rating Agencies 165
Chapter 9: The New, Post-Reputation Wall Street: Stock Exchanges 191
Chapter 10: The SEC and Reputation 215
Chapter 11: The SEC: Captured and Quite Happy About It 231
Chapter 12: Where We Are and Where We Are Headed: A Conclusion of Sorts 253
Purchase Info ?
With CourseSmart eTextbooks and eResources, you save up to 60% off the price of new print textbooks, and can switch between studying online or offline to suit your needs.
Once you have purchased your eTextbooks and added them to your CourseSmart bookshelf, you can access them anytime, anywhere.
$23.99 | ISBN-13: 978-0-13-303972-6