Successful privatization must be accompanied by the complete removal of privileges and any public policy mission. Bank behavior changes rapidly as profit maximization replaces the bureaucratic objective function. Once privileges are granted, they are difficult to remove. Therefore, privatization is a one-time (non-reversible) operation. The German mortgage bank, DePfa, went through a carefully planned and lengthy privatization process that was successful. Fannie Mae, the U.S. mortgage firm, became a privately owned institution endowed with special privileges, which led to a quasi-monopoly position. This resulted in suboptimal financial sector performance. Fannie Mae's special privileges have proven resistant to reform efforts.
Did you find this white paper useful?
24 out of 50 users found this white paper useful
Related white papers
Security of the WEP Algorithm
The 802.11 standard describes the communication that occurs in wireless local area networks (LANs). The Wired Equivalent Privacy (WEP) algorithm is used to protect wireless communication from eavesdropping. A secondary...
The Basics of Business-to-Business E-commerce Security
Learn about the technologies that enable secure B2B transactions over the Internet, among individual companies or trading communities. In today’s business-to-business arena, transactions flow from customer to suppliers and back to...
Deadlines Passed, But Merchants are Still Out of Compliance
The PCI-DSS deadlines for level 1 and level 2 merchants have come and gone, but questions still linger on how to meet compliance. This webinar covers the following topics: The risk...
Extended Validation SSL Certificates
Extended Validation SSL delivers the acknowledged industry standard for the highest level of online identity assurance processes for SSL certificate issuance. Find out how the EV standard increases the visibility...
Are You Prepared? Meeting PCI and Data Security Challenges
Ensuring that non-public information, including personal financial information, is communicated securely is an integral part of doing business and meeting payment card industry guidelines for data security. Register for this free,...
Data Mining and Privacy: a Conflict in the Making?
Privacy. It?s a loaded issue. In recent years privacy concerns have taken on a more significant role in American society as merchants, insurance companies, and government agencies amass warehouses containing...
Unmasking the Online Bad Guys
Malware authors can produce new, unique threats targeting businesses and employees every 45 seconds. Download this free whitepaper to learn about the entrepreneurs of internet crime and how to keep...
