The Basel Committee on Banking Supervision (BCBS) has called attention to the need to study, understand, and improve the corpo- rate governance of financial entities. The BCBS especially advocates a governance structure composed of a board of directors and senior management (Enhancing Corporate Governance for Banking Orga- nizations, September 1999 and February 2006). The core of the BCBS message is the conviction that good corporate governance increases monitoring efficiency. Furthermore, the Committee believes that corporate governance is necessary to guarantee a sound financial system and, consequently, a country’s economic development. To date, there are many studies on corporate governance, yet only a few papers focus on banks’ corporate governance (e.g., Adams and Mehran, 2005; Caprio et al., 2007; Levine, 2004; Macey and O’Hara, 2003), even though the key aspects of corporate gover- nance can be applied to banks. The problems of collective action faced by stakeholders who wish to ensure the efficient allocation of resources and the distribution of quasi rents, and the problems derived from different types of ownership and control, are clearly relevant to financial entities.
However, the relevance of banks in the economic system and the nature of the banking business make the problems involved in their corporate governance highly specific, as are the mecha- nisms available to deal with such problems. The complexity of the banking business increases the asymmetry of information and diminishes stakeholders’ capacity to monitor bank managers’ decisions. Banks are a key element in the payment system and play a major role in the functioning of economic systems. They are also highly leveraged firms, due mainly to the deposits taken from cus- tomers. For all these reasons, banks are subject to more intense regulation than other firms, as they are responsible for safeguard- ing depositors’ rights, guaranteeing the stability of the payment system, and reducing systemic risk. 留学生论文代写网代写留学生论文,英国硕士论文,澳洲论文,留学生论文代写网代写留学生论文,英国硕士论文,澳洲论文