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Enhancing Corporate Governance for Financial Institutions: The Role of International Standards

Author

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  • Kern Alexander
  • Rahul Dhumale

Abstract

The threat of systemic risk in international financial markets necessitates the establishment of universal standards for corporate governance of financial institutions. This paper addresses some important issues and concepts in the governance of multinational financial institutions and why international standards are needed to guide financial institutions in assessing and protecting against risk in financial markets. It acknowledges that different structural approaches to corporate governance exist across countries, and encourages practices which can strengthen corporate governance under diverse structures. An important task for supervisors and regulators is to ensure that incentives exist to encourage senior bank management to adopt good regulatory practices that approximate the economic risk exposure of the financial institution. This paper analyses corporate governance within framework of international financial markets and how international standards can be applied in a way that can effectively reduce systemic risk.

Suggested Citation

  • Kern Alexander & Rahul Dhumale, 2001. "Enhancing Corporate Governance for Financial Institutions: The Role of International Standards," Working Papers wp196, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp196
    Note: PRO-1
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    File URL: https://www.jbs.cam.ac.uk/cbrwp196/
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    References listed on IDEAS

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    1. Michael C. Jensen, 2010. "The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 43-58, January.
    2. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    3. Allen, Franklin & Gale, Douglas, 1995. "A welfare comparison of intermediaries and financial markets in Germany and the US," European Economic Review, Elsevier, vol. 39(2), pages 179-209, February.
    4. Robert Guttmann, 2018. "The Transformation of Banking," Post-Print hal-02098743, HAL.
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    Cited by:

    1. repec:onb:oenbwp:y:2010:i:1:b:1 is not listed on IDEAS
    2. Sándor Gardó, 2010. "Bank Governance and Financial Stability in CESEE: A Review of the Literature," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 6-31.

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    More about this item

    Keywords

    financial institutions; systemic risk; corporate governance; regulation;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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