Co-operative and competitive enforced self regulation: The role of governments, private actors and banks in corporate responsibility
AbstractPurpose – The primary purpose of the paper is to demonstrate how corporate responsibility and accountability could be fostered through monitoring and the involvement of governments in the regulation of firms. Design/methodology/approach – In considering why practices which stimulate incentives for private agents to exert corporate control should be encouraged, this paper highlights criticisms attributed to government control of banks. However, the theory relating to the “helping hand” view of government is advanced as having a fundamental role in the regulation and supervision of banks. Findings – Governments have a vital role to play in corporate responsibility and regulation given the fact that banks are costly and difficult to monitor – this being principally attributed to the possibility that private agents will lack required incentives or the ability to supervise banks. Research limitations/implications – Banks are costly and difficult to monitor – this being principally attributed to the possibility that private agents will lack required incentives or the ability to supervise banks. Practical implications – The paper illustrates how structures which operate in various systems, namely, stock market economies and universal banking systems, function (and attempt) to address gaps which may arise as a result of lack of adequate mechanisms of accountability. Social implications – The paper also draws attention to the impact of asymmetric information (generally and in these systems), on levels of monitoring procedures and how conflicts of interests which could arise between banks and their shareholders, or between governments and those firms being regulated by the regulator, could be addressed. Originality/value – Through its supervision of banks, governments also assume an important role where matters related to the fostering of accountability are concerned – not only because banks may have the power to affect firm performance, but also because some private agents are not able to afford internal monitoring mechanisms.
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Bibliographic InfoArticle provided by Emerald Group Publishing in its journal Journal of Financial Regulation and Compliance.
Volume (Year): 19 (2011)
Issue (Month): 2 (May)
Contact details of provider:
Web page: http://www.emeraldinsight.com
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Other versions of this item:
- Ojo, Marianne, 2010. "Co-operative and competitive enforced self regulation: the role of governments, private actors and banks in corporate responsibility," MPRA Paper 22918, University Library of Munich, Germany.
- K2 - Law and Economics - - Regulation and Business Law
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- G3 - Financial Economics - - Corporate Finance and Governance
- A10 - General Economics and Teaching - - General Economics - - - General
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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