Unit VII Financial Institution Name Institution Unit VII Financial Institution Question 1 Conflicts of interest entail some kind of moral hazard problems that arise when an organization or an individual has multiple conflicting interests or objectives (Crockett, Harris, Mishkin, & White, 2004). In most cases, conflicts of interest in the financial system occur in the form of misleading information that tends to benefit the financial organization involved at the expense of the public interests. Conflicts of interest in the financial system are normally considered an unethical behaviour. They can substantially hamper the quality of information in financial markets, increasing the risks associated with asymmetric information problems. The various forms of conflicts of interest found within the financial system include: Rating agencies conflict of interest (Mishkin & Eakins, 2012). This entails issuers of financial securities using rating agencies to biasly rate their creditworthiness favorably in order to attract investors. S