Banking Regulation Towards Advisory: The 'Culture Compliance' of Banks and Supervisory Authorities

27 Pages Posted: 2 Aug 2005

See all articles by Alessandro Carretta

Alessandro Carretta

University of Rome Tor Vergata - Faculty of Economics

Vincenzo Farina

University of Rome Tor Vergata

Paola Schwizer

University of Parma

Date Written: July 2005

Abstract

The financial regulation is moreover based on self-regulation and the coordination of external and internal supervision. This determines an evolution in the role played by the supervisory authorities, and in the manner in which they interact - with and almost advisory function - with the governance bodies of the banks, such as the board of directors, top management and external and internal auditors. The capacity to adequately perform such advisory functions entails the existence of consistent objectives, consistent knowledge and consistent cultural models. Our paper points at cultural gaps as a possible stumbling block in the efficient exchange of information and the sharing of problems and goals among regulators and the industry. We develop a cultural survey based on the application of a text-analysis model to a corpus of reference texts produced by two samples, drawn from among the supervisory bodies and the supervised entities. The empirical survey results reveal numerous fields of cultural differentiation, alongside several important areas in which the orientations of the two parties tend to overlap.

Keywords: Financial regulation, banking culture, cultural compliance, text analysis

JEL Classification: M14, N20

Suggested Citation

Carretta, Alessandro and Farina, Vincenzo and Schwizer, Paola, Banking Regulation Towards Advisory: The 'Culture Compliance' of Banks and Supervisory Authorities (July 2005). Available at SSRN: https://ssrn.com/abstract=764244 or http://dx.doi.org/10.2139/ssrn.764244

Alessandro Carretta

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, rome 00100
Italy

Vincenzo Farina (Contact Author)

University of Rome Tor Vergata ( email )

Via Columbia n.2
Rome, rome 00133
Italy
+390672595903 (Phone)
+39062040219 (Fax)

HOME PAGE: http://economia.uniroma2.it/faculty/104/farina-vincenzo

Paola Schwizer

University of Parma ( email )

Via J.F. Kennedy 6
Parma, 43100
Italy

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