The Social Reform of Banking

Conley, J. & Williams, C. (2014). The Social Reform of Banking; Journal of Corporation Law, 39(3), 101-134

UNC Legal Studies Research Paper No. 2483284

Osgoode Legal Studies Research Paper No. 60/2014

36 Pages Posted: 21 Aug 2014 Last revised: 17 Nov 2014

See all articles by Cynthia A. Williams

Cynthia A. Williams

York University - Osgoode Hall Law School

John M. Conley

University of North Carolina School of Law

Date Written: August 19, 2014

Abstract

Recent developments in banking, including high-profile prosecutions for illegal activities, portend further regulatory interventions on both sides of the Atlantic. Yet the structure of much banking regulation requires banks to make good faith determinations of the kinds of risks to which their loans and investments give rise -- determinations that can be, and in some cases have been, manipulated. Rather than evaluating specific regulatory interventions, this Article focuses on the culture within financial institutions themselves, particularly the global entities that are explicitly or implicitly too-big-to-fail, and on approaches to regulation that might affect and be affected by that culture. Our analysis is informed by the perspectives of anthropology, organizational and social psychology, and new governance regulatory theory. Weaving these strands of prior research together, the Article concludes with suggestions for reform, emphasizing structural reforms, accounting reforms (informed by ideas derived from both organizational psychology and transnational private regulation), and other regulatory approaches that might encourage cultural reforms within banking.

Keywords: financial regulation, regulatory theory, self-regulation, co-regulation, corporate culture, banking culture, new governance, Equator Principles, organizational psychology, corporate compliance, accounting reform, social accounting, social disclosure

JEL Classification: G21, G28, G38, K22, N20

Suggested Citation

Williams, Cynthia A. and Conley, John M., The Social Reform of Banking (August 19, 2014). Conley, J. & Williams, C. (2014). The Social Reform of Banking; Journal of Corporation Law, 39(3), 101-134, UNC Legal Studies Research Paper No. 2483284, Osgoode Legal Studies Research Paper No. 60/2014, Available at SSRN: https://ssrn.com/abstract=2483284

Cynthia A. Williams (Contact Author)

York University - Osgoode Hall Law School ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
416-736-5545 (Phone)

John M. Conley

University of North Carolina School of Law ( email )

Van Hecke-Wettach Hall, 160 Ridge Road
CB #3380
Chapel Hill, NC 27599-3380
United States
919-962-8502 (Phone)

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