Week 7 Tu t o r i a l : The Problem o f Agency


  1. What do you  understand  by the  term  ‘Agency  Problem’  and what  role  does asymmetric information play in producing this problem?
  2. Briefly explain the main series of events that led to the collapse of Storm Financial.
  3. In the article by Barry, outline the similarities in the cases of the Doyles, Phil Green and Steve Reynolds?
  4. A common feature of such episodes seems to be close and personal relationships between the financial planners and the banks. What evidence does Barry produce that suggests that this was also the case with Storm and their financial backers?
  5. Do the findings of the Milgram experiments shed light on why the clients of Storm Financial  “…did what they were told without demur”? If so, how?