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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

Corporate Governance and Banks: What Have We Learned From the Financial Crisis?

TL;DR: The authors explored the origins of excessive risk-taking in the banking industry and provided the analytical ammunition required to rigorously examine regulatory policy at a time when it is undergoing a complete metamorphosis.
Journal ArticleDOI

Gender Diversity on European Banks’ Boards of Directors

TL;DR: This article investigated the gender diversity of the corporate board of European Union banks and identified organizational characteristics that could be predictive of women's presence on bank boards, and they identified three factors that play a particularly important role in defining bank board gender diversity.
Journal ArticleDOI

Executive Compensation and Business Policy Choices at U.S. Commercial Banks

TL;DR: This paper examined whether and how the terms of CEO compensation contracts at large commercial banks between 1994 and 2006 influenced, or were influenced by, the risky business policy decisions made by these firms.
Posted Content

Performance and Trade-offs in Microfinance Organizations - Does Ownership Matter?

TL;DR: In this paper, the authors investigated whether the superiority of shareholder-owned MFOs is empirically supported and found that mutual and non-profit ownership can compete successfully with investor ownership in the micro finance market.
Journal ArticleDOI

Corporate Governance of Banks: A Survey

TL;DR: The authors reviewed the empirical literature on the corporate governance of banks and highlighted the main differences between banks and non-financial firms and focus on three characteristics which make banks special: (i) regulation, (ii) the capital structure of banks, and (iii) the complexity and opacity of their business and structure.
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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