scholarly journals Banks: regulation and corporate governance framework

2008 ◽  
Vol 5 (2) ◽  
pp. 449-458 ◽  
Author(s):  
Maria Cristina Ungureanu
Keyword(s):  
Corporate Governance ◽  
Financial Markets ◽  
Banking Sector ◽  
Banking Industry ◽  
The European Union ◽  
Governance System ◽  
Financial Systems ◽  
Governance Framework ◽  
Corporate Governance System ◽  
European Union Countries

The banking sector industry is somewhat unique because it is simultaneously consolidating and diversifying. Banks’ major role in stabilising the financial systems of countries and in spurring their economic growth explains the particularities of their own corporate governance. The specificity of banks, the volatility of financial markets, increased competition and diversification expose banks to risks and challenges. The banking industry is heavily regulated and supervised in every country around the globe. This, in turn, establishes a particular corporate governance system. The paper lays out the specific attributes of banks that influence their regulatory and supervisory environment, which, in turn, creates a unique corporate governance framework for the banking industry. The paper emphasises the benefits and limits of regulations and supervision on banks’ corporate governance and focuses its empirical results on the European Union countries.

The effect of borrower country financial system and corporate governance system types on the spread of syndicated loans

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nuno Moutinho ◽  
Carlos Francisco Alves ◽  
Francisco Martins
Keyword(s):  
Corporate Governance ◽  
Governance System ◽  
Financial Systems ◽  
Content Type ◽  
Financial Firms ◽  
Governance Systems ◽  
Corporate Governance System ◽  
Lower Interest Rate ◽  
Loan Spreads ◽  
The Cost

Purpose This study aims to analyse the effect of borrower’s countries on syndicated loan spreads, featuring countries according to institutional factors, namely, financial systems and corporate governance systems. Design/methodology/approach This study is an empirical investigation based on a unique sample of more than 85,000 syndicated loans from 122 countries. The paper uses standard and two-stage least squares regression analysis to test whether the types of financial and corporate governance systems affect loan spreads. Findings The paper finds that borrowers from countries with financial systems oriented towards the banking-based paradigm pay lower interest rate spreads than those from countries with financial systems oriented towards the market-based paradigm. In addition, there is evidence that borrowers from countries with more developed financial systems pay lower spreads. The results also show that borrowers from countries with an Anglo-Saxon governance system pay higher spreads than borrowers from countries with a Continental governance system. Research limitations/implications This study does not consider potential promiscuous relationships that can arise at the ownership structure and governance level between banks and borrowers and may affect loan spreads. Practical implications This study suggests that financial and corporate governance systems are essential factors in the financial intermediation process. Furthermore, the evidence indicates that corporates with higher potential agency costs and higher potential information asymmetry are requested to pay higher spreads. Therefore, the opportunities to such corporates invest optimally tend to be scarcer. Originality/value The paper highlights the impact of institutional factors on the cost of financing, characterising the countries according to the type of financial system and the type of corporate governance system. The study finds that borrowers from countries with bank-based financial systems pay lower interest rate spreads than those from countries with market-based financial systems. The paper also highlights how the level of financial development affects the cost of financing. The paper focusses on non-financial firms, unlike financial firms, which have been the focus of several empirical studies on topics relating to the cost of funding and corporate governance.

scholarly journals Institutional reforms and development of corporate governance and banking system in China

2017 ◽  
Vol 9 (2) ◽  
pp. 352 ◽  
Author(s):  
Vijayakumaran Ratnam ◽  
Sunitha Vijayakumaran
Keyword(s):  
Corporate Governance ◽  
Banking Sector ◽  
Banking System ◽  
Governance Structure ◽  
Chinese Government ◽  
Governance System ◽  
Corporate Sector ◽  
Institutional Reforms ◽  
Corporate Governance System ◽  
Management Responsibility

The objective of this paper is to review China’ instructional reforms and evaluate its effectiveness based on available empirical evidences with special reference to Chinese corporate governance system and financial system. As part of the wider economic reform initiated in the late 1970s, in the 1980s, the Chinese government adopted various measures aimed at reforming state owned enterprises (SOEs). These mainly include managerial autonomy, a management responsibility system, corporatization and partial privatization of former SOEs. In addition, the Chinese government took various steps to enhance the efficiency of the banking sector. The analysis shows that China’s efforts to improve the corporate sector through its own unique gradual and piecemeal approach has been successful in terms of introducing a formal governance structure for the corporate sector, liberalizing its financial sector, improving governance of state owned banks, and most importantly, developing the private sector as the back bone of the economy.

scholarly journals Assessing the Impact of Corporate Governance on Non-Performing Loans: Empirical Analysis of the Listed Commercial Banks of Pakistan

2019 ◽  
Vol IV (III) ◽  
pp. 188-196
Author(s):  
Ihtesham Khan ◽  
Muhammad Ilyas ◽  
Shehzad Khan
Keyword(s):  
Corporate Governance ◽  
Banking Industry ◽  
Annual Reports ◽  
Governance System ◽  
Nonperforming Loans ◽  
Time Period ◽  
Corporate Governance System ◽  
The Impact ◽  
Code Compliance

Financial crisis shows the ambiguous role of the corporate governance system. Hence, the main purpose of this paper is to assess the impact of corporate governance on Non-performing loans of the banking industry of Pakistan. The time period selected from 2006 to 2016 and source of data is annual reports of respective banks and the World Bank. In order to explain the relationship between the governance system and non-performing loans used descriptive, correlational and panel data analyses. The results revealed a negative and significant effect of corporate governance on nonperforming loans of sample firms of the study. Therefore, suggested for the banking industry of Pakistan to implement and make sure their reports according to corporate governance code compliance to control non-performing loans.

scholarly journals Appraisal of Financial Situation of the Polish Banking Sector from 2008 to 2012

Management ◽  
2013 ◽  
Vol 17 (2) ◽  
pp. 177-189
Author(s):  
Paweł Trippner
Keyword(s):  
Economic Development ◽  
Financial Markets ◽  
Financial Institutions ◽  
Banking Sector ◽  
Banking System ◽  
Financial System ◽  
The European Union ◽  
Financial Situation ◽  
Financial Condition ◽  
European Union Countries

Summary Appraisal of Financial Situation of the Polish Banking Sector from 2008 to 2012 The banking system is a very important element of the financial system of a country. As institutions of public trust, banks play a crucial role in the process of transforming savings into investments, which directly affects the country’s economic development. Maintaining the banking sector in a good financial condition guarantees stability of the financial system and economic development of Poland. The article aims to present the essence of operations of banks as financial institutions, present their role in the economy, and describe various methods of appraising their financial condition. In order to fulfil the above goals, a research hypothesis is put forward stating that the financial condition of the banking sector in Poland deteriorated in the analysed period as a result of an adverse impact of turbulence in financial markets and problems in banking sectors in the European Union countries.

scholarly journals Corporate Governance: Is It Time For Global Standards?

2011 ◽  
Vol 7 (2) ◽  
Author(s):  
Peter A. Stanwick
Keyword(s):  
United States ◽  
European Union ◽  
Corporate Governance ◽  
Financial Markets ◽  
Focal Point ◽  
Action Plan ◽  
Cultural Beliefs ◽  
The United States ◽  
The European Union ◽  
Governance System

Financial markets depend on the integrity of the financial information generated by management. In order for that integrity to be ensured, an effective corporate governance system must be in place by the corporation. While the United States has been the initial focal point on the effectiveness of corporate governance through the actions at Enron and WorldCom, European companies such as Ahold, Parmalat and Adecco have also demonstrated that the European Union faces challenges pertaining to corporate governance. The purpose of this paper is to compare how the United States and the European Union address the issue of corporate governance. The paper will examine and compare the Sarbanes-Oxley Act in the United States, the European Commissions Action Plan on corporate governance and the new corporate governance guidelines issues by the Organization for Economic Cooperation and Development. The paper will conclude with a discussion on whether global corporate governance standards are necessary to ensure the stability of global financial markets. The author will argue that certain core standards are universal in nature. However, flexibility is still warranted in some areas due to specific cultural beliefs and established business standards.

German Corporate Convergence to a Market Based System

2007 ◽  
Vol 9 (2) ◽  
pp. 209-232 ◽  
Author(s):  
Matthew Berger
Keyword(s):  
Corporate Governance ◽  
Financial Markets ◽  
Foreign Investment ◽  
Direct Investment ◽  
Investment Decisions ◽  
International Investment ◽  
Governance System ◽  
Legal Reforms ◽  
Corporate Governance System ◽  
International Investors

AbstractGermany has implemented several legal reforms in an attempt to attract international investment. Commentators proclaimed that a transition from a bank-based system of corporate governance to a market-based system was required in order for Germany to attract international investors. Debates still transpire regarding the success of the legal reforms implemented in an effort to make this change. This analysis explains Germany's previous corporate governance system and the new laws implemented to transform it to a market-based system. Empirical data is recited concerning the changes in foreign direct investment, German household investment decisions, and the German financial markets. The paper concludes that an analysis of this data reveals an increase of foreign investment in Germany and a substantial movement towards a market-based system throughout the duration of the legal reform.

scholarly journals Extraterritorial impacts of the Sarbanes-Oxley Act on external corporate governance – current evidence from a German perspective

2006 ◽  
Vol 3 (3) ◽  
pp. 113-127 ◽  
Author(s):  
Axel Haller ◽  
Jürgen Ernstberger ◽  
Christian Kraus
Keyword(s):  
Corporate Governance ◽  
Current Evidence ◽  
The European Union ◽  
Governance System ◽  
Sarbanes Oxley ◽  
Corporate Governance System ◽  
Eu Commission ◽  
Tremendous Impact ◽  
The Eu

The Sarbanes-Oxley Act (SOX) has not only had tremendous impact on the U.S corporate governance system, but also on other countries with companies subject to SOX. The paper analyzes the major direct impacts of SOX on the European Union (EU) and Germany as a Member State. The focus of the analysis is on rules concerning external corporate governance instruments, i.e. the auditing professions’ oversight, auditors’ independence and auditing standards. Additionally, the paper investigates whether the contemporary regulatory activities in the EU and Germany concerning external corporate governance can be explained as indirect institutional consequences of SOX. Although the EU Commission says for the record that it has an own long-term strategy of modernizing corporate governance, the paper demonstrates that several rules of SOX quite obviously served as a model for the EU regulatory activities. The same phenomenon can be observed for the new German regulations of external corporate governance

scholarly journals Corporate Consistency and the Regulations of the Corporate Governance System

2017 ◽  
Vol 7 ◽  
pp. 213-234
Author(s):  
Ryszard Kamiński ◽  
Michał Flieger
Keyword(s):  
Corporate Governance ◽  
Comparative Method ◽  
Descriptive Analysis ◽  
Daily Basis ◽  
Primary Sources ◽  
The European Union ◽  
Governance System ◽  
Consistency Model ◽  
Corporate Governance System ◽  
First Time

Corporate governance involves not only working out the relationship between a company and its shareholders, but also a search for consistency on a daily basis. When consistency is achieved, the shareholders’ satisfaction is higher and relations improve. Consistency is a prerequisite for a company’s effectiveness and efficiency, and it is the board’s task to make a corporation consistent. The first part of the paper introduces M. Flieger’s concept of corporate consistency, where platforms of consistency are introduced and the consistency model is proposed. This is the first time that such an introduction has been made, and this may lead to further discussion and research. The author points out that managers are rarely aware of the consistency problem, and there are no tools which enable a consistent system to be worked out. This makes the concept of corporate consistency worth investigating. In the second part of the paper, R. Kaminski focuses on the development of the European Union and Polish regulations, which were introduced as a consequence of the changing conditions in company activity. This section determines the content and sequence of the main issues discussed in the article. These include: the characteristics of the concept of a corporate governance system, the presentation of changes in regulations regarding a corporate governance system in the EU and the presentation of Polish regulations on corporate governance. The primary sources used in the work were literature and the rules and standards (mandatory and optional) on corporate governance. Both authors used descriptive analysis and the comparative method.

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