International Conference on Engineering and Business Management (EBM 2010 PAPERBACK)

Chengdu,China,China,3.24-3.26,2010

ISBN: 978-1-935068-05-1 Scientific Research Publishing, USA

Paperback 6066pp Pub. Date: March 2010

Category: Engineering

Price: $280

Title: Mechanism Design of Student Loans Policy
Source: International Conference on Engineering and Business Management (EBM 2010 PAPERBACK) (pp 3972-3975)
Author(s): Yuanyuan WANG, School of Management, Beijing Normal University, Beijing, China
Ya ZHOU, School of Management, Beijing Normal University, Beijing, China
Keqiang LI, School of Management, Beijing Normal University, Beijing, China
Zhu WEN, School of Management, Beijing Normal University, Beijing, China
Wenxin XIE, School of Management, Beijing Normal University, Beijing, China
Abstract: Abstract: The current incentive mechanism of student loans policy will lead to moral hazard, and induce operational risk in bank. Based on the principal-agent theory, this paper has studied the incentive mechanism in student loans policy, and it is concluded that compensating risk by subsidize interest rate of student loans can inspirit the bank to increase its effort level, which is also efficient for the society.
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