Peer monitoring and its capacity to deal with negative effects of moral hazard: An explorative case study of the Stability Growth Pact

This report studies whether the peer monitoring arrangement in the Stability Growth Pact (SGP) can decrease negative effects of moral hazard. Theory argues that peer monitoring can reduce moral hazard issues, because peers have the same kind of knowledge and expertise. Peers are therefore less hampered by information asymmetry as apposed to a...

The capability of peer monitoring to manage moral hazard

This thesis is the result of an explorative research to the capabilities of peer monitoring in the banking sector, to decrease the negative effects of moral hazard. The analysis shows that peers have limited ability and willingness to regulate one another, due to the existence of a governmental regulator, a disciplinary market and the...