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Research Handbook on International Banking and Governance
The contributors – top international scholars from finance, law and business – explore the role of governance, both internal and external, in explaining risk-taking and other aspects of the behavior of financial institutions. Additionally, they discuss market and policy features affecting objectives and quality of governance. The chapters provide in-depth analysis of factors such as: ownership, efficiency and stability; market discipline; compensation and performance; social responsibility; and governance in non-bank financial institutions. Only through this kind of rigorous examination can one hope to implement the financial reforms necessary and sufficient to reduce the likelihood and severity of future crises.
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Contributors
Contents
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The recent financial crisis has stimulated much debate on the governance of financial institutions, as well as research on the effects of governance arrangements on risk-taking, performance and financial institutions more generally. Furthermore, researchers are asking how regulation, legislation, politics and other factors influence the governance of financial institutions and their behavior in different dimensions. The specially commissioned contributions featured in this timely Handbook confront these complex issues.
The contributors – top international scholars from finance, law and business – explore the role of governance, both internal and external, in explaining risk-taking and other aspects of the behavior of financial institutions. Additionally, they discuss market and policy features affecting objectives and quality of governance. The chapters provide in-depth analysis of factors such as: ownership, efficiency and stability; market discipline; compensation and performance; social responsibility; and governance in non-bank financial institutions. Only through this kind of rigorous examination can one hope to implement the financial reforms necessary and sufficient to reduce the likelihood and severity of future crises.
Bringing the reader to the frontier of research on governance of financial institutions, this volume is sure to inspire future research in scholars and students of financial institutions, governance and banking. Practitioners in financial institutions and public regulatory and supervisory authorities will also find much of value and insight in this book.
The contributors – top international scholars from finance, law and business – explore the role of governance, both internal and external, in explaining risk-taking and other aspects of the behavior of financial institutions. Additionally, they discuss market and policy features affecting objectives and quality of governance. The chapters provide in-depth analysis of factors such as: ownership, efficiency and stability; market discipline; compensation and performance; social responsibility; and governance in non-bank financial institutions. Only through this kind of rigorous examination can one hope to implement the financial reforms necessary and sufficient to reduce the likelihood and severity of future crises.
Bringing the reader to the frontier of research on governance of financial institutions, this volume is sure to inspire future research in scholars and students of financial institutions, governance and banking. Practitioners in financial institutions and public regulatory and supervisory authorities will also find much of value and insight in this book.
Contributors
Contributors: E. Arbak, F. Arnaboldi, R. Ayadi, J.R. Barth, T. Berglund, A.W.A. Boot, D. Brash, B. Casu, Y. Chang, H. Choe, W.P. De Groen, J.K. Dietrich, W. Dolde, R. Galema, S. Gangopadhyay, C. Girardone, P.A. Gompers, Y. Gong, C.A.E. Goodhart, B.E. Gup, J. Hagendorff, I. Hasan, R.J. Herring, A.G.F. Hoepner, J. Houston, J. Itzkowitz, J.D. Knopf, S. Koibuchi, R.M. Lastra, B. Lee, R. Lensink, L. Li, C. Lin, Y. Ma, P. MacKay, M. Marinč, D.G. Mayes, R. Mersland, R. Mohan, P. Molyneux, A. Mullineux, A. Naranjo, A.A. Palvia, A.P. Prabha, H.L. Root, W. Sawangngoenyuang, S.K. Shanthi, C.-H. Shen, F.M. Song, L. Song, K.R. Spong, T. Subhanij, R.J. Sullivan, F. Vallascas, P.J. Wallison, I. Walter, L.J. White, C. Wihlborg, T.D. Willett, J.O.S. Wilson, Y. Xuan, Z. Zhou
Contents
Contents:
Foreword 1
by Franklin Allen
Foreword 2
by Harald Benink
Foreword 3
by Gerard Caprio and Ross Levine
Introduction and Overview
James R. Barth, Chen Lin and Clas Wihlborg
PART I: OWNERSHIP, EFFICIENCY AND STABILITY
1. Bank Governance: Concepts and Measurements
Frank M. Song and Li Li
2. Bank Ownership and Performance: A Global Perspective
Iftekhar Hasan and Liang Song
3. Is There a Conflict between Competition and Financial Stability?
Barbara Casu, Claudia Girardone and Philip Molyneux
4. What Drives Bank Operating Efficiency? The Role of Bank Competition and Credit Information Sharing
Chen Lin, Yue Ma and Frank M. Song
5. Corporate Borrower Nationality and Global Presence: Cross-Country Evidence on the Pricing of Syndicated Bank Loans
Joel Houston, Jennifer Itzkowitz and Andy Naranjo
6. Lessons Learned from Recent Financial Crises
Benton E. Gup
PART II: COMPENSATION, PERFORMANCE AND RISK
7. Bank Ownership and Risk Taking: Improving Corporate Governance in Banking after the Crisis
Kenneth R. Spong and Richard J. Sullivan
8. Executive Compensation and Risk-taking in European Banking
Rym Ayadi, Emrah Arbak and Willem Pieter De Groen
9. CEO Pay and Risk-taking in Banking: The Roles of Bonus Plans and Deferred Compensation in Curbing Bank Risk-taking
Jens Hagendorff and Francesco Vallascas
10. Bank Failures and CEO Compensation
Walter Dolde and John D. Knopf
11. Restricting Risk-taking by Financial Intermediaries through Executive Compensation
Tom Berglund
PART III: MARKET DISCIPLINE: PREREQUISITES AND EFFECTIVENESS
12. The Lost Cause: The Failure of the Financial Crisis Inquiry Commission
Peter J. Wallison
13. Market Discipline for Financial Institutions and Markets for Information
Apanard P. Prabha, Clas Wihlborg and Thomas D. Willett
14. Moral Hazard, Bank Resolution and the Protection of Depositors
David G. Mayes
15. The Governance of ‘Too Big to Fail’ Banks
Andy Mullineux
16. Incentives to Improve the Corporate Governance of Risk in Financial Institutions
Richard J. Herring
PART IV: GOVERNANCE, REGULATION AND SUPERVISION
17. The Boundary Problems in Financial Regulation
Charles A.E. Goodhart and Rosa M. Lastra
18. Financial Architecture, Prudential Regulation and Organizational Structure
Ingo Walter
19. Corporate Governance and Prudential Regulation of Banks: Is There Any Connection?
Lawrence J. White
20. The Policy Conundrum of Financial Market Complexity
Hilton L. Root
21. The Future of Financial Regulation: Reflections from an Emerging Market Perspective
Rakesh Mohan
PART V: GOVERNANCE, STRATEGY AND SOCIAL RESPONSIBILITY
22. Financial Innovations, Marketability and Stability in Banking
Arnoud W.A. Boot and Matej Marinč
23. Bank Acquisitions and Strategy since the GLB Act
J. Kimball Dietrich
24. Social, Environmental, Ethical and Trust (SEET) Issues in Banking: An Overview
Andreas G.F. Hoepner and John O.S. Wilson
25. Corporate Social Responsibility, Financial Performance and Selection Bias: Evidence from Taiwan’s TWSE-listed Banks
Chung-Hua Shen and Yuan Chang
PART VI: GOVERNANCE IN NON-BANK FINANCIAL INSTITUTIONS
26. Management Turnover, Regulatory Oversight and Performance: Evidence from Community Banks
Ajay A. Palvia
27. Redeemability as Governance: A Study of Closed-end and Open-end Funds under Common Management
Peter MacKay
28. The Role of Venture Capitalists in the Acquisition of Private Companies
Paul A. Gompers and Yuhai Xuan
29. Governance and Microfinance Institutions
Rients Galema, Robert Lensink and Roy Mersland
PART VII: REGIONAL AND COUNTRY STUDIES
30. Bank Governance: The Case of New Zealand
Don Brash
31. Corporate Governance in European Banking
Francesca Arnaboldi and Barbara Casu
32. Debt Forgiveness during Japan’s Lost Decade
Satoshi Koibuchi
33. Corporate Governance of Banks in Korea
Heungsik Choe and Byungyoon Lee
34. Banking Regulatory Governance in China: A Legal Perspective
Yufeng Gong and Zhongfei Zhou
35. Corporate Governance and Bank Performance in Thailand
Tientip Subhanij and Wanvimol Sawangngoenyuang
36. Governance Issues in Indian Microfinance
Shubhashis Gangopadhyay and S.K. Shanthi
Index
Foreword 1
by Franklin Allen
Foreword 2
by Harald Benink
Foreword 3
by Gerard Caprio and Ross Levine
Introduction and Overview
James R. Barth, Chen Lin and Clas Wihlborg
PART I: OWNERSHIP, EFFICIENCY AND STABILITY
1. Bank Governance: Concepts and Measurements
Frank M. Song and Li Li
2. Bank Ownership and Performance: A Global Perspective
Iftekhar Hasan and Liang Song
3. Is There a Conflict between Competition and Financial Stability?
Barbara Casu, Claudia Girardone and Philip Molyneux
4. What Drives Bank Operating Efficiency? The Role of Bank Competition and Credit Information Sharing
Chen Lin, Yue Ma and Frank M. Song
5. Corporate Borrower Nationality and Global Presence: Cross-Country Evidence on the Pricing of Syndicated Bank Loans
Joel Houston, Jennifer Itzkowitz and Andy Naranjo
6. Lessons Learned from Recent Financial Crises
Benton E. Gup
PART II: COMPENSATION, PERFORMANCE AND RISK
7. Bank Ownership and Risk Taking: Improving Corporate Governance in Banking after the Crisis
Kenneth R. Spong and Richard J. Sullivan
8. Executive Compensation and Risk-taking in European Banking
Rym Ayadi, Emrah Arbak and Willem Pieter De Groen
9. CEO Pay and Risk-taking in Banking: The Roles of Bonus Plans and Deferred Compensation in Curbing Bank Risk-taking
Jens Hagendorff and Francesco Vallascas
10. Bank Failures and CEO Compensation
Walter Dolde and John D. Knopf
11. Restricting Risk-taking by Financial Intermediaries through Executive Compensation
Tom Berglund
PART III: MARKET DISCIPLINE: PREREQUISITES AND EFFECTIVENESS
12. The Lost Cause: The Failure of the Financial Crisis Inquiry Commission
Peter J. Wallison
13. Market Discipline for Financial Institutions and Markets for Information
Apanard P. Prabha, Clas Wihlborg and Thomas D. Willett
14. Moral Hazard, Bank Resolution and the Protection of Depositors
David G. Mayes
15. The Governance of ‘Too Big to Fail’ Banks
Andy Mullineux
16. Incentives to Improve the Corporate Governance of Risk in Financial Institutions
Richard J. Herring
PART IV: GOVERNANCE, REGULATION AND SUPERVISION
17. The Boundary Problems in Financial Regulation
Charles A.E. Goodhart and Rosa M. Lastra
18. Financial Architecture, Prudential Regulation and Organizational Structure
Ingo Walter
19. Corporate Governance and Prudential Regulation of Banks: Is There Any Connection?
Lawrence J. White
20. The Policy Conundrum of Financial Market Complexity
Hilton L. Root
21. The Future of Financial Regulation: Reflections from an Emerging Market Perspective
Rakesh Mohan
PART V: GOVERNANCE, STRATEGY AND SOCIAL RESPONSIBILITY
22. Financial Innovations, Marketability and Stability in Banking
Arnoud W.A. Boot and Matej Marinč
23. Bank Acquisitions and Strategy since the GLB Act
J. Kimball Dietrich
24. Social, Environmental, Ethical and Trust (SEET) Issues in Banking: An Overview
Andreas G.F. Hoepner and John O.S. Wilson
25. Corporate Social Responsibility, Financial Performance and Selection Bias: Evidence from Taiwan’s TWSE-listed Banks
Chung-Hua Shen and Yuan Chang
PART VI: GOVERNANCE IN NON-BANK FINANCIAL INSTITUTIONS
26. Management Turnover, Regulatory Oversight and Performance: Evidence from Community Banks
Ajay A. Palvia
27. Redeemability as Governance: A Study of Closed-end and Open-end Funds under Common Management
Peter MacKay
28. The Role of Venture Capitalists in the Acquisition of Private Companies
Paul A. Gompers and Yuhai Xuan
29. Governance and Microfinance Institutions
Rients Galema, Robert Lensink and Roy Mersland
PART VII: REGIONAL AND COUNTRY STUDIES
30. Bank Governance: The Case of New Zealand
Don Brash
31. Corporate Governance in European Banking
Francesca Arnaboldi and Barbara Casu
32. Debt Forgiveness during Japan’s Lost Decade
Satoshi Koibuchi
33. Corporate Governance of Banks in Korea
Heungsik Choe and Byungyoon Lee
34. Banking Regulatory Governance in China: A Legal Perspective
Yufeng Gong and Zhongfei Zhou
35. Corporate Governance and Bank Performance in Thailand
Tientip Subhanij and Wanvimol Sawangngoenyuang
36. Governance Issues in Indian Microfinance
Shubhashis Gangopadhyay and S.K. Shanthi
Index
