Why are Banks Special? An Approach from the Corporate Governance Perspective

Scientific Annals - Al.I.Cuza University of Iasi, Economics Series, pp. 55-66, 2007

16 Pages Posted: 5 Feb 2008 Last revised: 11 Feb 2008

See all articles by Vasile Cocris

Vasile Cocris

Al.I.Cuza University of Iasi - Faculty of Economics and Business Administration

Maria Cristina Ungureanu

Sodali; Genoa Centre for Law and Finance, University of Genoa; European Corporate Governance Institute (ECGI)

Abstract

High standards in the governance of banks and firms are very important for economic growth. Banks have a critical position in the development of economies due to their major role in running the financial system. The banking industry is unique because it is simultaneously consolidating and diversifying. There is a significant public dimension to the banking firm; bank managers function in the light of two distinct sets of interests: one is the private interest, internal to the firm, and the other is the public interest, external to the firm. Previous literature analyses the implications of banks' specific attributes on their corporate governance framework. It emphasises two major aspects: greater opaqueness and greater regulation. Whether these attributes have a weakening effect on the traditional corporate governance mechanism is a matter debated by most research papers on the subject. This study is done on the specific characteristics of banks from the point of view of current economic framework, and the implications of these characteristics on the governance of banks. This paper analyses the environment with increased regulation of the banking firm, as a governance control mechanism.

Keywords: Banks, Corporate governance, Regulation and supervision, Stakeholders, Basel Accord

JEL Classification: E44, E58, G21, G34

Suggested Citation

Cocris, Vasile and Ungureanu, Maria Cristina, Why are Banks Special? An Approach from the Corporate Governance Perspective. Scientific Annals - Al.I.Cuza University of Iasi, Economics Series, pp. 55-66, 2007. Available at SSRN: https://ssrn.com/abstract=1090291

Vasile Cocris

Al.I.Cuza University of Iasi - Faculty of Economics and Business Administration ( email )

Carol I Blvd, Nr.11
Lasi
Romania

Maria Cristina Ungureanu (Contact Author)

Sodali ( email )

9 West 57th Street
26th Floor
New York, NY 10019
United States

Genoa Centre for Law and Finance, University of Genoa ( email )

Genova
Italy

HOME PAGE: http://www.clfge.org

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
Brussels, B-1050
Belgium

HOME PAGE: http://www.ecgi.org

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