Social and alternative banking: project selection and monitoring after the New Basel Capital Accord
Any economic activity calls for the exercise of moral judgement. There are some economic activities that actively promote collective benefit as a primary or secondary aim, and there are others that aim to increase the value of a firm. Investment decisions always have collective impact, but collective returns may be ignored or considered less important in company management if the objective is the maximisation of shareholder wealth. The allocative function exercised by banks in their credit activity may take this into account. Some banks nowadays focus on social profile, while others integrate the traditional approach with this new sensibility. But unfortunately banking regulations governing stability and soundness of the financial system make no mention of the social profile. The New Basel Capital Accord was an opportunity to recognise that bank's objectives may not consist only of the maximisation of shareholder wealth. But it was a missed opportunity, in that it gave advantages to traditional commercial banks and not to banks focussing on collective goals. This paper puts forward proposals for integrating the Basel II framework with profiles of collective bank credit policy. Social credit evaluation methods could help to identify those ethical banks which are more successful in meeting collective objectives. A sustainable credit appraisal methodology could have been examined by the Basel Committee and could have incentivated sustainable banking by giving it specific advantages.
|Date of creation:||2005|
|Contact details of provider:|| Postal: Via J.F. Kennedy 6, 43100 PARMA (Italy)|
Web page: http://economia.unipr.it/de
More information through EDIRC
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.:
- Taggart, Robert A, Jr & Greenbaum, Stuart I, 1978. "Bank Capital and Public Regulation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 10(2), pages 158-169, May.
- Donald Davis & Kevin Lee, 1997. "A Practical Approach To Capital Structure For Banks," Journal of Applied Corporate Finance, Morgan Stanley, vol. 10(1), pages 33-43.
- Berger, Allen N. & Herring, Richard J. & Szego, Giorgio P., 1995.
"The role of capital in financial institutions,"
Journal of Banking & Finance,
Elsevier, vol. 19(3-4), pages 393-430, June.
- Allen N. Berger & Richard J. Herring & Giorgio P. Szegö, 1995. "The Role of Capital in Financial Institutions," Center for Financial Institutions Working Papers 95-01, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Allen N. Berger & Richard J. Herring & Giorgio P. Szego, 1995. "The role of capital in financial institutions," Finance and Economics Discussion Series 95-23, Board of Governors of the Federal Reserve System (U.S.).
- Bhattacharya Sudipto & Thakor Anjan V., 1993. "Contemporary Banking Theory," Journal of Financial Intermediation, Elsevier, vol. 3(1), pages 2-50, October.
- Andrea Sironi, 2001. "An Analysis of European Banks' SND Issues and its Implications for the Design of a Mandatory Subordinated Debt Policy," Journal of Financial Services Research, Springer;Western Finance Association, vol. 20(2), pages 233-266, October.
- Andrea Sironi, 2000. "An analysis of European banks SND issues and its implications for the design of a mandatory subordinated debt policy," Finance and Economics Discussion Series 2000-41, Board of Governors of the Federal Reserve System (U.S.).
- Larry D. Wall & Pamela P. Peterson, 1998. "The choice of capital instruments," Economic Review, Federal Reserve Bank of Atlanta, issue Q 2, pages 4-17.
- João A. C. Santos, 2000. "Bank capital regulation in contemporary banking theory: a review of the literature," BIS Working Papers 90, Bank for International Settlements.
- Pringle, John J, 1974. "The Capital Decision in Commercial Banks," Journal of Finance, American Finance Association, vol. 29(3), pages 779-795, June.
- Kim, Daesik & Santomero, Anthony M, 1988. " Risk in Banking and Capital Regulation," Journal of Finance, American Finance Association, vol. 43(5), pages 1219-1233, December. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:par:dipeco:2005-ef01. 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: (Andrea Lasagni)
If references are entirely missing, you can add them using this form.