Structural banking reforms and their implications for banks’ corporate governance
Journal of Financial Regulation and Compliance
ISSN: 1358-1988
Article publication date: 28 October 2019
Issue publication date: 16 September 2020
Abstract
Purpose
The purpose of this paper is to examine from a comparative perspective, the impact of structural banking reforms on the legal frameworks for the corporate governance of credit institutions.
Design/methodology/approach
This facilitates a functional analysis of the resulting corporate governance structures, which in turn provides the basis for an analysis of conceptual concerns with regard to the independence of the separate entity.
Findings
The paper points out that structural banking reforms come with significant implications for existing corporate governance structures of credit institutions. The resulting corporate governance structures rise conceptual concerns with regard to both the effectiveness of the independence of the separate entity and the objectives of structural banking reforms generally.
Practical implications
The paper shows that the implementation of structural banking reforms is a complex operational issue and process for the banking groups and the regulators. The challenge will be to establish and upheld the ring fence in a way to lower the risk of intra-group contagion. There is a great need for regulatory and supervisory policies that reinforce the settled ring fence obligations.
Originality/value
This paper’s value lies in providing analysis of the implications of structural banking reforms for the corporate governance of credit institutions. The relevant statutory frameworks as such set only the core components of the new structure. Defining and implementing the design is left to the discretion of the regulators.
Keywords
Acknowledgements
This paper forms part of special section “Progression or regression: Regulatory and governance challenges after the global financial crisis and Brexit”, guest edited by Steve Letza, Gary Evans and Jens-Hinrich Binder.
Citation
Hellstern, C. (2020), "Structural banking reforms and their implications for banks’ corporate governance", Journal of Financial Regulation and Compliance, Vol. 28 No. 4, pp. 515-525. https://doi.org/10.1108/JFRC-04-2018-0058
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited