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Should we trust banks when they sit on the board of directors?

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  • Francesco Giavazzi
  • Marco Battaglini

Abstract

When financial markets are not fully developed large shareholders are an important feature of an efficient corporate governance system. Thanks to their (relative) financial strength, banks are good candidates to perform this leading role in the governance of firms. However, in the type of monitoring provided and in the strategies that they may choose, banks are affected by significant conflicts of interests: expecially when they exert power through proxy votes and they are important lenders of the firm.

Suggested Citation

  • Francesco Giavazzi & Marco Battaglini, "undated". "Should we trust banks when they sit on the board of directors?," Working Papers 117, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  • Handle: RePEc:igi:igierp:117
    as

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    References listed on IDEAS

    as
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