Asian Cases

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Asian Cases: Financial Ethics Cases from Hong Kong, China, Japan, Bangladesh, Taiwan, Australia

 

Mitigating TBTF: The Australian Four Pillars Policy

The so-called Four Pillars Policy is the mainstay of the Australian government’s intervention within the domestic Australian financial industry. The policy prevents mergers between the four largest Australian banks known collectively as the ‘Big Four’ banks. ‘Big Four’ banks and the rest of the Australian financial markets however, argue the policy is actually counterproductive and detrimental to the financial system as a whole. This research paper discusses the economic arguments by both the supporters and detractors of the Four Pillars Policy, summarises relevant empirical literature regarding Australian financial concentration and discusses the ethical frameworks that guided views on wider policy on consolidations. READ MORE…

 

Ethics of China’s Land Expropriation Rules and Reforms

Under China’s current rural land expropriation process, local governments make arbitrary decisions on expropriation, paying little compensation to peasant owners. The current process is a violation of procedural justice, corrective justice, and distributive justice according to the moral principles of John Rawls. Nor can the process be justified on utilitarian grounds. The marketization reform in Shenzhen, which allows rural land planned for certain purposes to enter the market without the expropriation process, has improved procedural justice and increased the good consequences. However, the implementation of the reform lacks legitimacy as it is the result of purely administrative decisions and goes against current Chinese land law. READ MORE…

 

China and Corruption: The Case of GlaxoSmithKline

GlaxoSmithKline (GSK) is Britain’s biggest drug maker. Chinese authorities found GSK guilty of bribing both hospitals and doctors to help promote their products in China, using a network of nearly seven hundred travel agencies to pay medical professionals, health-related organizations, and government officials. According to Chinese authorities, GSK funneled about 3 billion yuan, or US$482 million, through this network to recipients. Receipts were forged for purchases and transactions that never took place, including fake conferences. At first, GSK denied any involvement in the bribes.  READ MORE…

 

Economic Freedom Belies Crony Capitalism

Does empirical evidence support the perception that Hong Kong is a free market capitalistic economy or does it suggest pervasive crony capitalism? Crony capitalism, which is not inherently criminal, largely replaces market economies with political markets, in which economic success depends on harnessing connections. READ MORE…

 

 

Cheung Kong and the Apex Horizon Hotel

Early in 2013, the deal of the Apex Horizon All-Suite Hotel in Hong Kong gained attention and controversy because of its suspected adoption of a collective investment scheme. Ethical issues range from the design of publication materials to the closure of the deals. Amidst the criticism, Cheung Kong (Holdings) Limited called off the deal after about three months of investigation and discussion with the Securities and Futures Commission of Hong Kong. READ MORE…

 

 

Chinese Investments in Africa: The Ethics of Transparency

China’s investments in Africa attract considerable interest as the Chinese government expands its diplomatic engagement with the rest of the developing world. In particular, this engagement has seen large amounts of money invested from the People’s Republic of China into some of the poorest countries in Africa; Angola, Ethiopia and Sudan to name just a few. There are questions about the ethical implications of this lending, especially considering the poor human rights record of many of these African states. READ MORE…

 

The Bangladeshi Factory Collapse: A Case for Intervention and Policy Change

On April 24, 2013, an industrial building containing five factories collapsed in Savar, near Dhaka, the capital of Bangladesh. More than 1,100 people, predominately young women producing garments for export to western retailers, were killed in South Asia’s worst industrial accident since the Bhopal disaster of 1984.[i] The factory collapse sent reverberations across the globe and reignited the debate on the role of corporate and consumer responsibility, and on the ethics of sweatshops. READ MORE…

 

Insider Trading in Japan: The Nomura Case

Nomura Group is one of Japan’s largest financial conglomerate. Nomura was established in 1925, and acquired most of Lehman Brothers Asia, certain of Lehman’s operations in Europe and the Middle East, and the Lehman Brothers’ service platform in India in 2008. The Nomura Group has a broad range of services and products, such as securities, international and domestic IPO underwriting, asset management, and capital investment. Nomura is considered Japan’s largest and most powerful securities company. An insider trading scandal at Nomura Group shakes the Japanese conglomerate to its core. In 2010, market participants claim there is suspicious trading in deals Nomura is underwriting. Inpex (an oil and gas producer), Tokyo Electric Power, and Nippon Sheet Glass report suspicious trading activities prior to the issuance of new shares in their companies. From these reports, the Japan Securities and Exchange Surveillance Commission (SESC) launches an investigation, which leads to the definitive discovery of insider trading by Nomura sales officers. READ MORE…

 

Taiwan’s Asset Management Corporations

When a bank has serious financial problems, such as holding too much bad debt, there are two possible solutions. The first is to create an asset management corporation (AMC), which Taiwan did, and the second is to create a resolution trust corporation (RTC), which America did. The main difference between an AMC and an RTC is that the former does not decide when a bank is bad or remove it from the market. READ MORE…

 

Taiwan’s Credit Card Crisis

Beginning in 1990, the Taiwanese government allowed the formation of new banks. These new banks lent large sums of money to real estate companies with the goal of expanding their businesses and increasing profits. However, after a couple of years of expansion, the real estate market became saturated and profits from the sector stopped growing. READ MORE… 

 

 

 

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