Voluntary cooperation Essay Example | Topics and Well Written Essays - 750 words

Voluntary cooperation - Essay Example Investment trusts are companies just like any other company as they issue share to raise funds from shareholders, and thereafter invest that money. The difference between normal trading companies, and investment trusts is that, they invest their money in the shares of other companies. Contrary, they invest in physical assets like mobile phone networks and factories. The problem with the investment trust is that sometimes they deviate from fundamental policy without the approval of the stakeholders. In addition, securities sold to companies by an affiliated person acting as the principal (Larkins 428). In investment advisory contract, there were failures in obtaining approval of the board of directors or stockholders. As it has been noted by the stakeholders, that there were omissions and failure to present financial information, they should put in place devices to regulate such omissions. The companies should make sure that they buy securities from the principals and not the affiliat ed persons. Voluntary cooperation enables minimization of risks of life. The free markets relieve risks as much as possible by providing security against aggression. They foster it by allowing people to invest whilst enacting the insurance policies that allow people to pool and abate risks. In addition, voluntary charity is available; this enables the donation of resources to those who are less secure. Financial crisis, revealed a fundamental weakness in the pre-crisis financial architectures for managing, preventing, and resolving crises in the financial global system.