So how do you achieve tunneling? So, okay. Suppose you are in control of a company, you're on the board of directors or you're a major stockholder, who can pack the board of directors with cronies. Or you might be a CEO, who is not being watched carefully by the board of directors. But let's just say generally you're- you have a major ownership in the country- company you might own a good fraction of the shares. What do you do to get steal from the company? You've got to disguise it. You've got to disguise it in business complexities so that when somebody sues you, it gets all into a quagmire that they can't figure out what did you do? So what you do is you sell assets of the company at a below market price to some crony of yours. So, you have a factory that you're not using anymore and you just sell the building. But you don't- you don't take bids on it. You just say- you have some excuse why you didn't. You say, "I don't know what. This is my business partner we have a trusting relationship. I sold it to him but maybe for 20 % of its market value. And then later- later he'll do me a favor too. But I can't take the money right now because- then I would look like I'm a thief.". All right? So will the shareholders ever figure out that you just did this? You see, you've taken value out of the company. They've got to figure out what that factory is. How do they know? They're just shareholders. So they can't see it. So you do this, obviously, you do this if you're only slightly corrupt and very loyal to your friends. Also, you can make contracts with other companies and pay way too much for the service. Now so, you sign a contract with your friend's company, your brother in law maybe. Maybe it's family, and you paid three times the price the market price for that service. So then, the shareholders might find out and call up and complain. And so, alright, here's what you do. You make the contract a thousand pages long, they can't even read it. It's got so many ins and outs. How do they know, how can they know that you're paying too much? Also excessive executive compensation. This appears to be a problem especially in the United States. You get people to write letters saying that our new president is just genius, business genius and maybe some people believe that. But you pay this guy $50 million a year. Loan guarantees, typically occur in inter-corporation loans. So, my corporation will lend money to another corporation, or guarantee someone else's loan to the other corporation and it's all hid behind a corporate veil, one corporation loaned to another corporation, who's going to figure it out? But in fact, the other corporation is just my crony, my friend and I'm making a loan, I know he's not gonna pay it back. He's gonna tunnel it out of his company and- Also expropriation of corporate opportunity. So, corporation has been developing expertise and technology in a certain line of business the way progress occurs and in corporations typically, is that some slightly different business suddenly appears that you only know about because you're in the business and so, you can jump on it. But instead of jumping out, you the CEO you get your friend to do it and you teach him all the secrets of your own corporation and then he takes the great business opportunity. You can also do dilutive share issues, issue a lot of shares and then tunnel the money out some other way and the stockholders are hurt without even seeing it. And insider trading, you can announce news about the company that's good after you bought extra shares and then announce- and then sell your shares before you announce bad news. So, all these are forms of tunneling. Directors have a duty to prevent tunnelling. In U.S. law, when you are finally are called by the Yale College corporation to ask to serve on the corporation, you have to know, I'm telling you now you have a duty of care and that means to act as a reasonable, prudent or rational person would. You can't neglect your duties as a member of the board and you have a duty of loyalty. That means preventing insiders from benefiting at the expense of shareholders. You have to be loyal to the shareholders. That's your constituent. You are representing- that wouldn't be true of Yale, there are no shareholders, but for other companies. And you have to avoid self-dealing transactions. So here loyalty is not just a moral principle, it's a legal principle. That's what you are supposed to do as a director. Here's an example of tunnelling from France, where tunneling is according to Johnson et al., much more common in the United States. So, a French company, SARL Peronnet, is a French company owned by the Peronnet family. It leases a warehouse from the Peronnet family at a high price, this is a true case. Minority shareholders sued, saying this was tunneling. The French court ruled that the transaction had a legitimate business purpose and that it was beyond the court to judge whether the price was too high. So they refused to take the case. That means that tunneling was successful. Now, it is difficult from a court- for a court to take such a case, because then a judge has to get involved in judging whether the price was right. And in France, they don't think they can do that. But in the U.S. or the U.K, it would have been a factor. So, I think this accounts for the bigger success of stock markets in the U.S. and the U.K. So, I guess the banks argue that this regulation of risk destroys their ability to do their job, which is to take on risk, I guess. How are you... weigh the two against each other? Well, this is an ongoing complicated issue. There are complaints that there are too many regulations and too many forms to file that it's costly, just compliance is costly. There are complaints that sometimes the regulations kick in when the company is above a certain size. So that means that companies never want to rise above that size, because they don't want to deal with all these regulations. And that sounds harmful, as well. I think it's a matter of case by case basis and regulators have to appreciate that too many regulations will gum up the whole system and make people despair of doing anything. Also, there is sometimes a problem with corrupt regulators, they have to be bribed. And that's a bad situation. So, I think that the important thing for regulation is to create an environment for regulators which is conducive toward their having the real spirit of doing good for society. We are professionals, we're trying to do good for everyone and not to be bureaucratic or insensitive to the cross they're imposing on others. With that, I think regulators can be a huge benefit to our-And they're really necessary for a modern economy.