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The Corporate Governance of Banks

TLDR
In this paper, the authors argue that commercial banks pose unique corporate governance problems for managers and regulators, as well as for claimants on the banks' cash flows, such as investors and depositors.
Abstract
The study argues that commercial banks pose unique corporate governance problems for managers and regulators, as well as for claimants on the banks' cash flows, such as investors and depositors The authors support the general principle that fiduciary duties should be owed exclusively to shareholders However, in the special case of banks, they contend that the scope of the fiduciary duties and obligations of officers and directors should be broadened to include creditors In particular, the authors call on bank directors to take solvency risk explicitly and systematically into account when making decisions or else face personal liability for failure to do so

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Citations
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Journal ArticleDOI

The adjustments of corporate governance mechanisms in canadian banks following regulatory changes

TL;DR: In this paper, the authors observed changes to the boards of directors, to the committees reporting to the board, to board of directors independence and adoption to certain charters and checklists in Canadian banks for the periods covering the years 2002-2004.
Dissertation

Three essays on corporate control

TL;DR: In this paper, the authors explore whether ownership matters in a fundamental sense by comparing the performance of stockholder-owned firms to the much less analyzed nonprofit firms, and find evidence that product market competition plays this role as a substitute disciplining device.

Enhancing Public Confidence in Financial Reporting: The Role of Corporate Governance

TL;DR: In this article, the authors investigated the role of corporate governance in enhancing public confidence in financial reporting and concluded that corporate governance is necessary to the proper functioning of banks and that Corporate Governance can only prevent bank distress only if it is well implemented.
Journal Article

Analysis of the Impact of Governance on Performance: Case of Moroccan Banks

TL;DR: In this paper, the authors examined the relationship between corporate governance mechanisms: board structure and capital structure on the performance of Moroccan universal banks and provided empirical evidence of the association between banks performance and corporate governance characteristics using panel data analysis.
Book ChapterDOI

The share price and trading volume reactions of U.S.-listed foreign banks to the financial services modernization act of 1999

TL;DR: In this article, the effect of the Gramm-Leach-Bliley Act (GLB) on the market value of U.S.-listed foreign banks is examined. But the authors focus on the role of two corporate governance perspectives, the stakeholder (code law) and shareholder (common law) models, in a cross-sectional analysis of foreign bank market reaction to the GLB.
References
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Book

The Modern Corporation and Private Property

TL;DR: Weidenbaum and Jensen as mentioned in this paper reviewed the impact of developments not fully anticipated by Berle and Means, such as the rise of the service sector, and the significant role played by institutional investors in the owner/manager equation.
Journal ArticleDOI

Bank Runs, Deposit Insurance, and Liquidity

TL;DR: The authors showed that bank deposit contracts can provide allocations superior to those of exchange markets, offering an explanation of how banks subject to runs can attract deposits, and showed that there are circumstances when government provision of deposit insurance can produce superior contracts.
Journal ArticleDOI

Agency Problems and the Theory of the Firm

TL;DR: In this article, the authors explain how the separation of security ownership and control, typical of large corporations, can be an efficient form of economic organization, and set aside the presumption that a corporation has owners in any meaningful sense.
Book

A Monetary History of the United States

TL;DR: The long-awaited monetary history of the United States by Friedman and Schwartz is in every sense of the term a monumental scholarly achievement as discussed by the authors, and the treatment of innumerable issues, large and small, have been brought to bear on the solution of complex and subtle economic issues.
Journal Article

Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure

TL;DR: In this paper, the authors integrate elements from the theory of agency, property rights and finance to develop a theory of the ownership structure of the firm and define the concept of agency costs, show its relationship to the separation and control issue, investigate the nature of the agency costs generated by the existence of debt and outside equity, demonstrate who bears costs and why and investigate the Pareto optimality of their existence.
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