scholarly journals Developments in the european banking industry

2009 ◽  
Author(s):  
Μαρία-Ελένη Αγοράκη
Keyword(s):  
Corporate Governance ◽  
Banking Industry ◽  
Board Structure ◽  
Governance System ◽  
Firm Financial Performance ◽  
Governance Challenges ◽  
The Board Of Directors ◽  
European Banking ◽  
European Banks ◽  
And Performance

Corporate governance has become a leading topic of research, considering its importance as an implement for transparency in financial markets and corporations. On the other hand, the role of the banks is fundamental in any economy that urges for strong corporate governance. Banks are “special” financial institutions posing unique corporate governance challenges. However, very little attention has been paid to the corporate governance of banks. Recent scandals in the financial sector have brought corporate governance at the forefront of academic and supervisory attention. Banks’ versatile role in the economic system has caught regulatory and supervisory interest around the world in an effort to inspire high quality corporate governance standards. Board structure, in the sense of board size and composition, and its impact on corporate performance constitutes an indispensable and, at the same time, prevalent theme of the corporate governance discussion. This thesis examines corporate governance issues in the European banking industry. More specifically, it examines the relationship between board structure and performance, on a sample of 57 large European banks, over the period 2002-2006. The board structure mechanisms applied, are the size of the board of directors and the percentage of non-executives on the board. In addition, this study employs different measures of firm financial performance both market-based and accounting based. Control variables for the bank size and risk as well as for the different corporate governance system are included in the models. The empirical analysis also incorporates a number of bank-specific variables. […]

scholarly journals BOARD OF DIRECTORS EFFECTIVENESS CHALLENGE: AN INTROSPECTIVE ON THE GOVERNMENT LINK COMPANIES EXPERIENCE

2020 ◽  
Vol 3 (10) ◽  
pp. 01-18
Author(s):  
Suraiya Ishak ◽  
Ahmad Raflis Che Omar
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Secondary Data ◽  
Board Structure ◽  
Corporate Boards ◽  
Governance System ◽  
Governance Challenges ◽  
The Board Of Directors ◽  
The Government ◽  
Board Decision Making

The Board of directors represents the essential pillar in the corporate governance system. The Board of directors exerts significant influence in corporate control through the control, service, and strategic roles. This article aims to identify factors that influence the effective function of the corporate boards based on the government link companies (GLCs) experience in Malaysia. This study utilizes an unobtrusive method, which employs publicly available secondary data. The data are obtained from the online publications hit through the keywords of the entity’s name. Two entities, which sparked controversies in Malaysia during the period of mid-2018 until early 2019 are referred to as the observed case for this study. The content analysis on the materials capture a few themes of challenges comprised of (1) patrimonialism within board structure; (2) appointment of individuals of non-expert; (3) exaggerate practices of cross-directorship among GLCs board; (4) dominance influence of chairman onboard activities; and (5) vague board decision-making process. The originality of this study lies in the process that optimizes the strength of the qualitative method to comprehend corporate governance challenges by incorporating a true scenario.

An Analysis of Large Bank Corporate Governance and Litigation Expenses

2018 ◽  
Keyword(s):  
Corporate Governance ◽  
Banking Industry ◽  
The Past ◽  
Good Corporate Governance ◽  
Total Capital ◽  
The Us ◽  
European Banking ◽  
Banking Institutions ◽  
European Banks ◽  
Legal Costs

Over the past decade, the banking industry has incurred over $300 billion in litigation and related legal costs. We analyzed the litigation expense data and corporate governance data of seven US and six European banking institutions. The 13 banking intuitions incurred nearly $200 billion in litigation expenses, roughly two-thirds of the total litigation expense incurred by the entire banking industry. We compared corporate governance metrics to the litigation expenses for the same 13 banking institutions. There are four main findings: First, litigation expenses of large banks have been on the decline since 2015; second, although the US banks incurred much greater litigation expenses during the 2010–2014 period, their litigation expenses have declined much more quickly than those of the European banks during the 2015–2017 period; third, litigation expenses incurred by European banks have been much higher than those of US banks when compared with bank total revenues and total capital; fourth, for US banks there is a strong correlation between improved corporate governance and lower litigation costs. However, for European banks it appears that the comply-or-explain approach to corporate governance muddies the link between good corporate governance and lower litigation costs.

Banking in Europe

2019 ◽  
pp. 999-1032
Author(s):  
John Goddard ◽  
Philip Molyneux ◽  
John O. S. Wilson
Keyword(s):  
Financial Services ◽  
Sovereign Debt ◽  
Financial Integration ◽  
Banking Industry ◽  
Debt Crisis ◽  
The European Union ◽  
Fully Integrated ◽  
European Banking ◽  
European Banks ◽  
And Performance

This chapter focuses on the evolution of the banking industry in the European Union since the signing of the Treaty of Rome in 1957 to the present day. We provide an overview of developments in the regulation, financial integration, and the structure and performance of the European banking industry. A brief discussion of the global financial crises and their resultant impact on European banks together with coverage of the later Eurozone sovereign debt crisis is also presented, along with structural reforms, and the ongoing progress in creating a fully integrated banking and financial services industry throughout the Eurozone. A major challenge for the industry relates to restoring profitability back to pre-crises levels. At present, many banks remain encumbered by regulatory demands that, while helping their solvency, act as a drag on performance. Given the regulatory and economic environment under which European banks currently operate, their performance will be subdued for some time to come.

scholarly journals Directorship, collateralized shares, risk, and performance of Taiwan banking industry

2008 ◽  
Vol 6 (Special Issue 1) ◽  
pp. 57-71
Author(s):  
Yi-Kai Chen ◽  
Lanfeng Kao ◽  
Alan T. Wang ◽  
Ming–Hsuan Hsieh
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Banking Industry ◽  
Stock Exchange ◽  
Securities Market ◽  
Bank Risk ◽  
Taiwan Stock Exchange ◽  
Monitoring Mechanism ◽  
The Board Of Directors ◽  
And Performance

In recent years, considerable concerns have arisen over the issue of corporate governance in banks’ supervision. One of the major issues has been investigated whether the sound mechanism of corporate governance benefits bank risk management and performance. The collateralized shares, serving stocks as collaterals, are one of financial leverage approaches and it is likely to be an incentive for block shareholders to misapply assets due to the deviation between the controlship and the ownership. The objective of this study is to examine whether the attitude of the board of directors toward risk will affect the bank risk and performance. Quarterly data of commercial banks listed either on the Taiwan Stock Exchange or GreTai Securities Market from 1999 to 2007 are examined in this study. The results show that the collateralized shares may have contributed to a lower return due to a higher risk and they are in line with previous studies our results are in line with previous researches. In conclusion, the monitoring mechanism should enforce relatively regulations more strictly to avoid the agency problems. Especially to the insiders of influence such as board of directors or block shareholders, more strictly regulations and the disclosure of relatively information should be necessary. The result will be expected to lead to better understanding of the nature of the collateralized shares and laying the groundwork for realizing that is the collateralized shares worth monitoring. It may provide policy implication for the regulators in the later monitoring requirement.

Earnings management and equity incentives: evidence from the European banking industry

2019 ◽  
Vol 27 (2) ◽  
pp. 244-261 ◽  
Author(s):  
Mohammad Alhadab ◽  
Bassam Al-Own
Keyword(s):  
Earnings Management ◽  
Management Practices ◽  
Banking Industry ◽  
Future Research ◽  
Loan Loss ◽  
Content Type ◽  
Loan Loss Provisions ◽  
Equity Incentives ◽  
European Banking ◽  
European Banks

Purpose This study aims to examine the effect of equity incentives on earnings management that occurs via the use of loan loss provisions by using a sample of 204 bank-year observations over the period 2006-2011. Design/methodology/approach The authors use the data of 39 European banks to test the main hypothesis. Several valuation models and regressions are used to measure the main proxies for executives’ compensation and the determinant factors of loan loss provisions. Findings The empirical results reveal that earnings management that occurs via discretionary loan loss provisions is associated with equity incentives in the banking industry. In particular, European banks’ executives with high equity incentives are found to manage reported earnings upwards by reducing loan loss provisions. The results therefore show that income-increasing earnings management via discretionary loan loss provisions is widely practised by the executives of European banks and that this is partly motivated by executives’ compensation. Practical implications The findings of this paper present important implications for regulators in the European Union, who should take further steps to reform the regulatory environment to monitor and mitigate the earnings management practices that occur via the manipulation of loan loss provisions. Earnings management practices do not just negatively affect subsequent performance but are also found to lead to firms’ failure. Thus, regulators should take the necessary reforms to protect the wealth of stakeholders (investors, creditors, etc.). Originality/value This study provides the first evidence on the relationship between equity incentives and earnings management in the European banking industry. The study sheds more light on an issue of great interest to a broad audience that does not receive much attention in the prior research, thus opening new avenues for future research.

scholarly journals Board of directors, performance and firm value in Brazilian listed state-owned enterprises

2020 ◽  
Vol 18 (2) ◽  
pp. 1
Author(s):  
Carolina Coletta ◽  
Roberto Arruda de Souza Lima
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Board Of Directors ◽  
Firm Value ◽  
Board Structure ◽  
Agency Conflicts ◽  
Governance Practices ◽  
The Board Of Directors ◽  
Structure Index ◽  
Corporate Governance Practice

<p>This paper investigates the relationship between the board of directors' structure and firm performance and the value of Brazilian listed state-owned enterprises (SOEs), from 2002 to 2017, totaling 327 observations using an unbalanced panel data with fixed and random effects regressions. The evolution of corporate governance practices adopted by the boards is presented for this period, using a Board Structure Index (BSI). The results indicate a significant positive relation between the board's structure and firm performance, measured by ROE and ROA, and firm value, measured by Tobin's <em>q</em>. These findings are consistent with corporate governance literature, in the sense that the board's role of monitoring management reduces agency conflicts. The results also show an improvement in adopting corporate governance practice on Brazilian SOEs' boards over the last decade.</p>

scholarly journals Corporate Governance Role in Improving the Financial Information Quality within the Saudi Electricity Company: دور حوكمة الشركات في تحسين جودة المعلومات المحاسبة في الشركة السعودية للكهرباء

2020 ◽  
Vol 4 (1) ◽  
Author(s):  
Arwa Hassan Baabbad
Keyword(s):  
Corporate Governance ◽  
Significant Relationship ◽  
Information Quality ◽  
Survey Methodology ◽  
Governance System ◽  
And Performance ◽  
The Right ◽  
Descriptive Survey ◽  
The Impact

The present study aimed to find out the role of corporate governance in improving the quality of information in the Saudi Electricity Company. The researcher used the descriptive survey methodology. As to achieve the study objectives، the researcher utilized the questionnaire tool، in which the study sample (50) members of SEC distributed into employees، managers and decision makers. The study concluded to many results، among of which are: there is a statistically significant relationship between the availability of corporate governance system and performance improvement of the Saudi Electricity Company، there is a statistically significant relationship between corporate governance and appropriateness in improving the performance of the Saudi Electricity Company، it was also found that there is a statistically significant relationship between corporate governance and optimal disclosure in improving the performance of Saudi Electricity Company. The study also found that there is a statistically significant relationship between corporate governance and the right timing in improving the performance of the Saudi Electricity Company. The study suggested number of recommendations، among of which are: the importance of the shareholding companies to comply with the corporate governance regulations considering the interest of companies and their shareholders and all other parties benefiting from the financial statements، attempting to take advantage of the multiple benefits of corporate governance and expand its application in the various economic units in Saudi Arabia، conduct studies on companies that applies the requirement of the Corporate Governance Regulations، and the impact of the application of corporate governance on the shares of these units to find out the relationship between the quality of accounting information in light of the application of corporate governance and the stock market from another angle، imposing deterrent penalties concerning the Corporate Governance Regulations on companies that did not apply this regulation.

Board, ownership and performance of banks with a dual board system: Evidence from Taiwan

2010 ◽  
Vol 16 (2) ◽  
pp. 219-234 ◽  
Author(s):  
Chi-Jui Huang
Keyword(s):  
Corporate Governance ◽  
Empirical Support ◽  
Developed Countries ◽  
Negative Influence ◽  
Bank Performance ◽  
Board Structure ◽  
Outside Directors ◽  
Industrial Enterprises ◽  
And Performance ◽  
Board System

AbstractThe influence of corporate governance on a firm's performance has recently been studied in industrial enterprises in developed countries, but not in services such as banks with a dual board system in Asia's newly-industrialized economies (NIEs). This research examines the effects of board structure and ownership on a bank's performance using a sample of 41 commercial banks in an Asian NIE (Taiwan). Results showed that board size, numbers of outside directors, and family-owned shares are positively associated with bank performance, whereas the number of supervisory directors has a negative influence on performance. The findings provide empirical support for corporate governance, which improves the performance of banks with a dual board system in Taiwan.

scholarly journals Corporate Governance in Banks and its Impact on Risk and Performance: Review of Literature on the Selected Governance Mechanisms

2014 ◽  
Vol 3 (3) ◽  
pp. 53-85
Author(s):  
Shkendije Himaj
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Theoretical Background ◽  
Board Structure ◽  
Governance Mechanisms ◽  
Performance Review ◽  
Performance Effects ◽  
And Performance ◽  
The Impact ◽  
Insight Into

Abstract Corporate governance is viewed as an important, essential, and most significant factor for well-functioning of firms. Recent academic work and policy analyses have given insight into the governance problems in banks exposed to the financial crisis and suggest possible solutions. This paper begins by explaining the importance of corporate governance and its impact on risk taking and bank performance based on the theoretical background relevant to the corporate governance of banks. I combine the literature that looks at three areas of governance: ownership structure; board structure; and risk management, with the literature on risk-taking and performance effects in order to better assess the weight of the impact that these governance mechanisms have on both performance and risk. The paper concludes by highlighting the areas where further research is needed.

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