Progress on Improving Banks’ Corporate Governance

by Lee J. Ernst, for Financial Services Commission, January 11, 2010.

The Global Financial crisis has shed light on the importance of Corporate Governance in Financial Institutions. In particular, banks have been the major beneficiaries of government releif programs* such as government guarantee for bank deposits and foreign debts.

However as the OECD and the BCBS noted, banks’ board of directors often neglected their social responsibility by failing in risk management, pursuing short-term profits, and paying out excessive compensation.

*Since September 2008, 24 countries including Korea have adopted government guarantee programs to protect the financial system.

Against this backdrop, improving Corporate Governance in financial institutions, particularly in the banking sector, is being actively discussed at the global level. Direct financial regulations may bring about side effects by undermining financial intermediation and adding burden to financial consumer. In contrast, improving Corporate Governance minimizes the side effects and restores the public trust in financial institutions to ensure that the financial sector can support the real economy and prevent the recurrence of crisis…(continue reading)

Advertisements

0 Responses to “Progress on Improving Banks’ Corporate Governance”



  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




Blog coordinator

Cefeidas Group

Archives

cgl-med-linked-in

cgl-med-linked-in
free counters

%d bloggers like this: