IDEAS home Printed from https://ideas.repec.org/b/erf/erfstu/21.html
   My bibliography  Save this book

Bank management between shareholders and regulators

Editor

Listed:
  • Morten Balling
    ()

Author

Listed:
  • Christian Harm

Abstract

This essay discusses the corporate governance of banks. Bank managers must balance competing demands from shareholders and regulators, which distinguishes banks from most other firms. The essay is structured into three parts. The theoretical section first broadly defines management and its governance as a process with certain built-in ambiguities that defy a strict notion of accountability. Then, a focus on financial stakeholders clarifies the different governance objectives of owners and creditors, and integrates bank regulation into the concept of debt governance. The empirical section surveys the extant literature to derive insights as to which theoretical predictions have so far received more wide-spread support, and in which areas the insights generated by researchers may still be too vague to lend themselves as a basis for policy advice. The third section then spells out a recommendation for a logically consistent regime in which shareholders (equity governance) and regulators (debt governance) can meaningfully coexist in their quest to guide and constrain bank managers.

Suggested Citation

  • Christian Harm, 2002. "Bank management between shareholders and regulators," SUERF Studies, SUERF - The European Money and Finance Forum, number 21 edited by Morten Balling.
  • Handle: RePEc:erf:erfstu:21
    as

    Download full text from publisher

    File URL: http://www.suerf.org/docx/o_9be40cee5b0eee1462c82c6964087ff9_365_suerf.pdf
    File Function: Main Text
    Download Restriction: no

    References listed on IDEAS

    as
    1. Susan Woodward, 1988. "A Transaction Cost Analysis of Banking Activity and Deposit Insurance," Cato Journal, Cato Journal, Cato Institute, vol. 7(3), pages 683-699, Winter.
    2. Cem Karacadag & Michael W. Taylor, 2000. "The New Capital Adequacy Framework - Institutional Constraints and Incentive Structures," SUERF Studies, SUERF - The European Money and Finance Forum, number 8 edited by Morten Balling, March.
    3. Warner, Jerold B. & Watts, Ross L. & Wruck, Karen H., 1988. "Stock prices and top management changes," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 461-492, January.
    4. Nikhil Varaiya & David Ely, 1997. "Assessing the Resolution of Insolvent Thrift Institutions post FIRREA: The Impact of Resolution Delays," Journal of Financial Services Research, Springer;Western Finance Association, vol. 11(3), pages 255-282, June.
    5. Yermack, David, 1997. " Good Timing: CEO Stock Option Awards and Company News Announcements," Journal of Finance, American Finance Association, vol. 52(2), pages 449-476, June.
    6. Wall, Larry D. & Peterson, David R., 1995. "Bank holding company capital targets in the early 1990s: The regulators versus the markets," Journal of Banking & Finance, Elsevier, vol. 19(3-4), pages 563-574, June.
    7. Whidbee, David A. & Wohar, Mark, 1999. "Derivative activities and managerial incentives in the banking industry," Journal of Corporate Finance, Elsevier, vol. 5(3), pages 251-276, September.
    8. Rolf Skog, 1997. "Does Sweden Need a Mandatory Bid Rule? A critical analysis," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    9. Peter R Haiss & Gerhard Fink, 1998. "Seven Years of Financial Market Reform in Central Europe," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    10. Yermack, David, 1995. "Do corporations award CEO stock options effectively?," Journal of Financial Economics, Elsevier, vol. 39(2-3), pages 237-269.
    11. Welch, Ivo, 1997. "Why Is Bank Debt Senior? A Theory of Asymmetry and Claim Priority Based on Influence Costs," Review of Financial Studies, Society for Financial Studies, vol. 10(4), pages 1203-1236.
    12. Verbrugge, James A & Jahera, John S, Jr, 1981. "Expense-Preference Behavior in the Savings and Loan Industry," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 13(4), pages 465-476, November.
    13. Wahal, Sunil, 1996. "Pension Fund Activism and Firm Performance," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 31(01), pages 1-23, March.
    14. John Calverley & Sarah Hewin & Kevin Grice, 2000. "Emerging Stock Markets After the Crisis," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    15. George Gelauff & Corina den Broeder, 1997. "Governance of stakeholder relationships: The German and Dutch experience," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paula Bongini, 2003. "The EU Experience in Financial Services Liberalization: A Model for GATS Negotiations?," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    2. Sándor Gardó, 2010. "Bank Governance and Financial Stability in CESEE: A Review of the Literature," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 6-31.
    3. Johan Devriese & Mathias Dewatripont & Dirk Heremans & Grégory Nguyen, 2004. "Corporate governance, regulation and supervision of banks," Financial Stability Review, National Bank of Belgium, vol. 2(1), pages 95-120, June.
    4. repec:onb:oenbwp:y:2010:i:1:b:1 is not listed on IDEAS
    5. Bert Scholtens & Dick van Wensveen, 2003. "The Theory of Financial Intermediation: An Essay On What It Does (Not) Explain," SUERF Studies, SUERF - The European Money and Finance Forum, number 2003/1 edited by Morten Balling, March.
    6. Jean-Paul Abraham & Peter Van Dijcke, 2002. "European Financial Cross-Border Consolidation: At the crossroads in Europe? By exception, evolution or revolution?," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    7. RODEAN Maria-Daciana, 2015. "The Financial Performance Of Commercial Banks Listed And Traded On Bucharest Stock Exchange," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 67(Supplemen), pages 135-144, September.

    More about this item

    Keywords

    banks; bank regulation; corporate governance;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:erf:erfstu:21. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dragana Popovic). General contact details of provider: http://edirc.repec.org/data/suerfea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.