12. Remedies?

The chapter outlines steps which might be taken to mitigate, though not wholly eliminate, the three problems we have identified in the merger market: misaligned incentives, distorted financial engineering, and asymmetric information. It identifies which authorities or individuals could initiate the changes, ranging from government, central banks, and accounting standard-setters to non-executive directors. And it suggests the means by which change could be achieved – from tax reform, to tighter regulation, to contract redesign. Efficiency gains would not be guaranteed and equity issues could remain. But we do contend that the measures would represent a significant advance of the status quo.