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The purpose of this paper is to study the role of misleading experiences, and how decision‐makers' experience can sometimes lead them to think they are right when they are really wrong.

Literature was reviewed in neuroscience, cognitive psychology and decision theory on how people make decisions and what decision‐making biases influence thinking. A total of 83 strategic decisions were studied to understand what potential biases existed and how those biases affected the quality of decision making.

Decision making is more often an emotional than rational process, in large part because of how our brains are wired. This process works most of the time, but not always. As a result, it is critical to identify those red flag conditions where our decisions are most vulnerable to error, with misleading experiences being one of the most central of these red flags. The paper discusses how to identify whether misleading experiences are potentially dangerous.

While the paper relies on multiple literatures and the authors' own original empirical work, a topic as complex as how our brains make decisions clearly cannot lead to definitive conclusions. Future research might investigate more of the contingency situations where misleading experiences might be dangerous.

This study is the first that highlights how central misleading experiences can be to mistaken decision making. It is based on significant original research, and has implications that are clearly practical for business leaders.

The purpose of this paper is to investigate a deposit insurance program for household deposits, which is designed to act as safety net in order to minimize or eliminate the risk of loss of depositors' funds with banks represents a primary element of this reform.

This research paper is scientific investigation aimed at discovering and interpreting facts related to deposit insurance system in Azeri context. The goal of the research process is to produce new knowledge, through the exploratory research, which structures and identifies new problems, and the constructive research, which develops solutions to a problem.

The main finding is that the deposit insurance system in Azeri context as well everywhere provides for the security of funds in the event of bank failure and, thus, contributes substantially to the stability of the financial system in Azerbaijan. The deposit insurance system supports the smooth functioning of the payment system and the credit mechanisms and facilitates the exit of problem banks.

As a result of this research paper some changes may be made in local legislation in order to defend the depositor's rights in the most effective way in the case of bank failures.

The originality of this paper is that it for the first time describes the deposit insurance system of the Republic of Azerbaijan, its advantages and disadvantages. The paper is addressed to the international business community, particularly those involved in all aspects of banking and deposit insurance law.

The purpose of this paper is to examine the complexities of reorganizing and/or liquidating troubled banks under the European Union's (EU) current institutional framework as it is defined by its directives and by national supervisory, remedial, and insolvency practices.

The paper compares provisions of different EU directives that impact financial institutions and summarizes national remedial practices.

The paper documents the diversity that currently exists among national supervisory, remedial and failure resolution practices for banks. It also assesses the economic efficiency of the institutional framework for resolving problem banks that is defined by the Reorganization and Winding‐up Directive and identifies components of the directive that can hamper efficient cross‐border resolutions.

There is a deficiency in publicly available information on EU member countries' practices for disciplining and resolving troubled banks.

The paper assesses issues/conditions that can hamper efficient cross‐border resolutions – issues on which policymakers should focus when they reform the current framework. It also explores areas of coordination with other EU directives that deal with financial crisis management that are relevant in the current financial crisis.

The paper makes policy recommendations for reforming the EU's current institutional framework for resolving troubled banks.

Like many industrial nations over the last four decades, the Japanese economy has undergone a number of regime shifts, making parameter estimations difficult. One of the most significant shifts occurred in inflation in the mid 1970s as OPEC suddenly raised oil prices. This abrupt change likely caused consumers' expectations of future inflation to deviate significantly from realized (ex‐post) inflation. Using a Markov chain model, inflation forecasts that take into consideration changing regimes are employed to derive a unique set of real stationary variables that are likely to better represent consumers' expectations and are an alternative to the standard approach of adjusting nominal variables with ex‐post inflation. We employ these real variables in the consumption‐based capital asset pricing model (CCAPM). Estimates of the representative investor's coefficient of relative risk aversion (CRRA) are derived within the framework typically used to examine the equity premium puzzle. Our tests confirm that the equity premium puzzle, if it exists in Japan, is not as significant as previously thought.

An effective bank resolution regime requires taking action while the bank still has positive net worth and shareholder claims still have economic value. Such actions raise a number of legal issues with respect to the rights of shareholders. This paper aims to consider how to strike a balance between the need to protect the legitimate rights of shareholders and the need for a prompt and rapid action and a failure resolution mechanism that minimizes disruptions to the financial system and preserves market discipline.

The paper examines the nature of the shareholders' rights and the legal protection afforded to them. In the European context, the relevant sources of law are the European Convention on Human Rights and the applicable community legislation. It considers different options for resolution within this framework ranging from a pre‐packaged resolution decided by the shareholders ex ante to the outright divestiture of the shareholders once certain regulatory thresholds are breached while the bank still has positive net worth.

The curtailment of shareholder rights should seek to generate appropriate incentives for shareholders and other stakeholder and achieve broad objectives of enhancing predictability and maintaining public goods, while at the same time providing for due process, proportionality and adequate compensation.

The paper presents options on how to reform existing frameworks in order to facilitate bank restructurings in a crisis.

The paper discusses key elements that policy makers need to consider in the design of a regulatory framework for early intervention and resolution.

The purpose of this paper is to provide a brief introduction to the role of the Fannie Mae/ Freddie Mac duopoly in the American housing market.

First, the paper defines the “government sponsored enterprise,” which is the type of hybrid public/private entity that Fannie and Freddie are and provides an introduction to the other significant government sponsored enterprises. It then explains what Fannie and Freddie do in the American mortgage market and provides a brief history of how the two companies developed. Finally, it evaluates the two companies as duopolists in the conforming mortgage market.

The paper concludes by suggesting that the current financial crisis presents an opportunity to rethink whether the Fannie/Freddie duopoly continues to serve the public interest.

Because of its length, the paper does not review alternative approaches to the status quo that the US Government can take to ensure that it has a stable federal housing finance policy.

The paper argues that the current financial crisis provides an opportunity to revisit the design of the structure of the US housing finance market.

The paper sets forth the rationale and legal basis for characterizing Fannie Mae and Freddie Mac as duopolists.

The purpose of this paper is to consider whether a move from self‐regulation in the form of the Banking Code to statutory regulation by the Financial Services Authority (FSA) of retail banking conduct of business is to be supported.

The paper begins by examining the nature of the self‐regulatory process and then considers its strengths and weaknesses in the context of the Banking Code. It then looks at the changes proposed by the FSA. Focusing in particular on the issue of enforcement, the paper contrasts the powers of the Banking Code Standards Board and the FSA.

The paper concludes that, while a move to statutory regulation is to be supported, there is concern about whether such a move will bring the benefits that might have been expected.

More attention needs to be paid to the ways that different forms of regulation operate in practice, with empirical research particularly valuable.

The paper adds to the (relatively brief ) literature on consumer protection in banking, and the even briefer body of research on self‐regulation.

The purpose of this paper is to understand how communication strategies and the use of numbers can ensure the buy-in and cooperation of stakeholders.

Drawing on legitimacy theory, this study analysis documents regarding the communication strategies of New Zealand (NZ)'s Prime Minster, Jacinda Ardern, during the COVID-19 pandemic, in order to extract lessons for organizations. The authors contrast Ardern's communications with those of Donald Trump, the President of the United States (US), as evidence that leaders do not necessarily follow these strategies.

The findings show that clear, consistent and credible communications, backed up by open access to the numerical data that underlie the decisions, ensure that these decisions are seen as legitimate, ensure that citizens/stakeholders feel leaders are accountable and believe in the necessity of measures taken and that they conform to the guidelines and rules. By contrast, the strategy of attempting to withhold information, blaming others, refusing to acknowledge that there are problems and refusing to address problems lead to non-conformance by citizens/stakeholders. Business leaders could apply these lessons to the management of crises in their organizations to ensure buy-in from employees and other stakeholders. Leaders and organizations that follow these communication strategies can emerge in a stronger position than before the crisis.

This paper develops a theoretical framework of strategies aimed at maintaining and disrupting legitimacy among key audiences, which can be used in future research.

This paper highlighting how organizations and organizational leaders can best communicate with stakeholders using accounting, thus coming across as being accountable during crisis times.

The legitimacy maintenance strategies outlined in this paper ensures that stakeholders feel leaders and the organizations they represent hold themselves accountable.

This paper outlines the lessons that an organization can learn from communication strategies adopted by governments during the COVID-19 crisis. The paper extends legitimacy theory by explicitly acknowledging the ability to disrupt the legitimacy of others and including this in the authors’ theoretical framework.