International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Financial Crisis and Banks Corporate Governance: The Regulatory Response
Francesca Battaglia, Marika Carboni

The recent crisis has pointed out the need to re-examine the adequacy of the banks corporate governance principles in order to evaluate whether additional guidance and clarification are necessary referring to particular key areas. We aim to assess if the regulatory response to the banking corporate governance failures has been adequate. Our findings show that the regulatory intervention, led both to non-binding rules developed by international organizations, and binding rules issued by regulatory authorities, has been mainly guided by the idea that financial institutions are systemically relevant. Secondly, we outline that another common choice has been a prompt regulatory response in order to overcome the main corporate governance weaknesses developed during the crisis, with a specific focus on remuneration policies and risk management. Thirdly, it is possible to conclude that, observing the more recent regulatory interventions dealing with corporate governance after the global financial crisis, a rule-based approach is prevailing on the lighter principle-based approach.

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