After a crisis, broad-sweeping reforms are enacted to restore trust. With the 2013 Fourth Capital Requirements Directive (CRD IV), the European Union has engaged in an ambitious overhaul of banking regulation following the Great Financial Crisis. Part of it tackles the perceived failings of banks? governance. We focus on various provisions that aim to reshape bank boards?
composition, functioning, and liabilities, and argue that they are unlikely to improve bank boards? effectiveness and to prevent excessive risk-taking. All in all, these rules may well negatively affect EU banks? governance. We conclude that European policymakers and supervisors should avoid using a heavy hand, respectively when issuing rules implementing CRD IV provisions on bank boards and when enforcing them.
Under the New Deal framework for money and payments—which had its roots in the National Bank Act of 1864—banks in the United States were governed in...
We develop a model in which brown (high-emission) and green (clean-energy) firms compete and seek financing from banks and the capital market. We use...