The new Italian Banking Regulation concerning banks' organization and corporate governance

Abstract

Purpose

The purpose of this paper is to describe the Bank of Italy's new comprehensive regulatory framework containing guidelines on the organization and corporate governance of banks.

Design/methodology/approach

The paper describes the structure of the regulatory framework and the content of the rules, including rules on a bank's choice of board model, a bank's corporate governance project representing bylaws and internal organization, tasks and powers of governing bodies, composition of governing bodies, compensation and incentive mechanisms, and information flows.

Findings

The paper reveals that the new rules are in line with recent prudential measures that assign a central role to corporate organization and require banks to establish appropriate corporate governance arrangements and efficient management and control mechanisms aimed to support the risks to which they are exposed. The new regulatory framework also pivots on the principles set forth by Basel Committee's guidance on corporate governance for banking organizations.

Originality/value

The paper provides a useful introduction to new Italian organization and corporate governance guidelines for banks by an experienced banking and securities lawyer.

Citation

Opromolla, G. (2008), "The new Italian Banking Regulation concerning banks' organization and corporate governance", Journal of Investment Compliance, Vol. 9 No. 2, pp. 50-54. https://doi.org/10.1108/15285810810886199