G. Visentini

Bio: G. Visentini is an academic researcher. The author has contributed to research in topics: Corporate security & Stakeholder. The author has an hindex of 1, co-authored 1 publications receiving 7 citations.

Corporate Governance in Banking: A Conceptual Framework

Abstract: In the wake of far reaching financial system reforms, almost three fourths of the member countries of the IMF experienced significant episodes of systemic crisis and associated bank failures. Notably absent in the ensuing debates on the correlation between financial system reforms and systemic crisis was discussion of corporate governance in the affected banks and the role it may have played in the provoking financial crisis. Consideration of corporate governance in banks is, however, apparently easier said than done. While there is a great deal of empirical research on corporate governance, very little of it concerns the behaviour of owners and managers of banks; all of it assumes that banks conform to the concept of the firm used in Agency Theory. The aim of this paper is to demonstrate the limitations of that assumption and to propose an alternative conceptual framework more suitable to its analysis. We argue that commercial banks are distinguished by a more complex structure of information asymmetry arising from the presence of regulation. We show how regulation limits the power of markets to discipline the bank, its owners and its managers and argue that regulation must be seen as an external force, which alters the parameters of governance in banks.

Bank Management between Shareholders and Regulators

Abstract: This essay discusses the corporate governance of banks. Bank managers must balance competing demands from shareholders and regulators, which distinguishes banks from most other firms. The essay is structured into three parts. The theoretical section first broadly defines management and its governance as a process with certain built-in ambiguities that defy a strict notion of accountability. Then, a focus on financial stakeholders clarifies the different governance objectives of owners and creditors, and integrates bank regulation into the concept of debt governance. The empirical section surveys the extant literature to derive insights as to which theoretical predictions have so far received more wide-spread support, and in which areas the insights generated by researchers may still be too vague to lend themselves as a basis for policy advice. The third section then spells out a recommendation for a logically consistent regime in which shareholders (equity governance) and regulators (debt governance) can meaningfully coexist in their quest to guide and constrain bank managers.

Corporate Governance in the Financial Sector of Pakistan

Abstract: La Porta et al. (1998) assign Pakistan, a common-law country, the maximum score of 5 for their anti-director rights index. Pakistan should therefore be a country with good investor protection attracting large amounts of investments. However, the reality could not be more different. Pakistan has been lagging behind other, comparable Asian economies in terms of incoming foreign direct investment as well as GDP-per-capita growth. This paper focuses on the Pakistani banking sector. The paper analyses the banks ownership and control structure. It finds that Pakistan has its own idiosyncrasies, which are difficult to associate with La Porta et al.s characterisation of corporate governance and investor protection in common-law countries. The paper also reviews the recent reforms of corporate governance.

Banks: Regulation and Corporate Governance Framework

Abstract: The banking sector is somewhat unique because it is simultaneously consolidating and diversifying. Banks' major role in stabilising the financial systems of countries and in spurring their economic growth explains the particularities of their own corporate governance. The specificity of banks, the volatility of financial markets, increased competition and diversification expose banks to risks and challenges. The banking industry is heavily regulated and supervised in every country around the globe. This, in turn, establishes a particular corporate governance system. The paper lays out the specific attributes of banks that influence their regulatory and supervisory environment, which creates a unique corporate governance framework for the banking industry. The paper emphasises the benefits and limits of regulations and supervision on banks' corporate governance and focuses its empirical results on the European Union countries.

Why are Banks Special? An Approach from the Corporate Governance Perspective

Abstract: High standards in the governance of banks and firms are very important for economic growth. Banks have a critical position in the development of economies due to their major role in running the financial system. The banking industry is unique because it is simultaneously consolidating and diversifying. There is a significant public dimension to the banking firm; bank managers function in the light of two distinct sets of interests: one is the private interest, internal to the firm, and the other is the public interest, external to the firm. Previous literature analyses the implications of banks' specific attributes on their corporate governance framework. It emphasises two major aspects: greater opaqueness and greater regulation. Whether these attributes have a weakening effect on the traditional corporate governance mechanism is a matter debated by most research papers on the subject. This study is done on the specific characteristics of banks from the point of view of current economic framework, and the implications of these characteristics on the governance of banks. This paper analyses the environment with increased regulation of the banking firm, as a governance control mechanism.