The Corporate Governance of Banks: A Concise Discussion of Concepts and Evidence

The author examines the corporate governance of banks. When banks efficiently mobilize and allocate funds, this lowers the cost of capital to firms, boosts capital formation, and stimulates productivity growth. So, weak governance of banks reverber...

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Main Author:	Levine, Ross
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	ACCOUNTING ASSET PRICES AUDITING BANK ASSETS BANK CAPITAL BANK CREDIT BANK FAILURES BANK HOLDING COMPANIES BANK LIABILITIES BANK REGULATION BANK REGULATORY AGENCIES BANK SUPERVISION BANKING CRISES BANKING INDUSTRY BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BOARDS OF DIRECTORS BONDS BORROWING CAPITAL ALLOCATION CAPITAL FORMATION CAPITAL MARKETS CAPITAL STANDARDS CAPITAL STRUCTURE CENTRAL BANKS COLLATERAL COMMERCIAL BANKS COMMON STOCK COMPETITIVENESS CONNECTED LENDING CONTRACT ENFORCEMENT CORPORATE CONTROL CORPORATE FINANCE CORPORATE GOVERNANCE CORPORATE OWNERSHIP CORRUPTION COST OF CAPITAL DEBT DEMAND DEPOSITS DEPOSIT INSURANCE DEPOSITORS DISCLOSURE LAWS DIVIDENDS ECONOMIC GROWTH ECONOMICS EFFECTIVE GOVERNANCE EMERGING MARKET ECONOMIES EQUITY MARKETS EXTERNALITIES FINANCIAL DEVELOPMENT FINANCIAL ECONOMICS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIATION FINANCIAL SECTOR FINANCIAL SYSTEMS FOREIGN BANKS GOVERNMENT BANKS GOVERNMENT GUARANTEES GOVERNMENT INTERVENTION GOVERNMENT POLICIES GUIDELINES INDUSTRIALIZED COUNTRIES INFORMATION ASYMMETRIES INFORMATION DISCLOSURE INFORMATIONAL ASYMMETRIES INSIDER LENDING INSURANCE INSURANCE COMPANIES INTEREST INCOME INTEREST RATES INVESTOR PROTECTION INVISIBLE HAND LAWS LEGAL SYSTEMS LENDERS OF LAST RESORT LIQUIDATION LIQUIDITY MARKET DISCIPLINE MATURITIES MEDIA MERGERS PENALTIES POLICY RESEARCH POLITICAL SYSTEM POLITICAL SYSTEMS POLITICIANS POOLS PRIVATE BANKS PRIVATE SECTOR PRIVATIZATION PRODUCTIVITY PUBLIC POLICY PURCHASES REAL ESTATE RISK TAKING SAVINGS SECURITIES SECURITIES MARKETS SHAREHOLDERS STATE BANKS STATE OWNED BANKS STATE OWNERSHIP SUBORDINATED DEBT TRANSACTION COSTS WARRANTS
Online Access:	http://documents.worldbank.org/curated/en/2004/09/5168087/corporate-governance-banks-concise-discussion-concepts-evidence http://hdl.handle.net/10986/14239

id	okr-10986-14239
recordtype	oai_dc
spelling	okr-10986-142392021-04-23T14:03:21Z The Corporate Governance of Banks: A Concise Discussion of Concepts and Evidence Levine, Ross ACCOUNTING ASSET PRICES AUDITING BANK ASSETS BANK CAPITAL BANK CREDIT BANK FAILURES BANK HOLDING COMPANIES BANK LIABILITIES BANK REGULATION BANK REGULATORY AGENCIES BANK SUPERVISION BANKING CRISES BANKING INDUSTRY BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BOARDS OF DIRECTORS BONDS BORROWING CAPITAL ALLOCATION CAPITAL FORMATION CAPITAL MARKETS CAPITAL STANDARDS CAPITAL STRUCTURE CENTRAL BANKS COLLATERAL COMMERCIAL BANKS COMMON STOCK COMPETITIVENESS CONNECTED LENDING CONTRACT ENFORCEMENT CORPORATE CONTROL CORPORATE FINANCE CORPORATE GOVERNANCE CORPORATE OWNERSHIP CORRUPTION COST OF CAPITAL DEBT DEMAND DEPOSITS DEPOSIT INSURANCE DEPOSITORS DISCLOSURE LAWS DIVIDENDS ECONOMIC GROWTH ECONOMICS EFFECTIVE GOVERNANCE EMERGING MARKET ECONOMIES EQUITY MARKETS EXTERNALITIES FINANCIAL DEVELOPMENT FINANCIAL ECONOMICS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIATION FINANCIAL SECTOR FINANCIAL SYSTEMS FOREIGN BANKS GOVERNMENT BANKS GOVERNMENT GUARANTEES GOVERNMENT INTERVENTION GOVERNMENT POLICIES GUIDELINES INDUSTRIALIZED COUNTRIES INFORMATION ASYMMETRIES INFORMATION DISCLOSURE INFORMATIONAL ASYMMETRIES INSIDER LENDING INSURANCE INSURANCE COMPANIES INTEREST INCOME INTEREST RATES INVESTOR PROTECTION INVISIBLE HAND LAWS LEGAL SYSTEMS LENDERS OF LAST RESORT LIQUIDATION LIQUIDITY MARKET DISCIPLINE MATURITIES MEDIA MERGERS PENALTIES POLICY RESEARCH POLITICAL SYSTEM POLITICAL SYSTEMS POLITICIANS POOLS PRIVATE BANKS PRIVATE SECTOR PRIVATIZATION PRODUCTIVITY PUBLIC POLICY PURCHASES REAL ESTATE RISK TAKING SAVINGS SECURITIES SECURITIES MARKETS SHAREHOLDERS STATE BANKS STATE OWNED BANKS STATE OWNERSHIP SUBORDINATED DEBT TRANSACTION COSTS WARRANTS The author examines the corporate governance of banks. When banks efficiently mobilize and allocate funds, this lowers the cost of capital to firms, boosts capital formation, and stimulates productivity growth. So, weak governance of banks reverberates throughout the economy with negative ramifications for economic development. After reviewing the major governance concepts for corporations in general, the author discusses two special attributes of banks that make them special in practice: greater opaqueness than other industries and greater government regulation. These attributes weaken many traditional governance mechanisms. Next, he reviews emerging evidence on which government policies enhance the governance of banks and draws tentative policy lessons. In sum, existing work suggests that it is important to strengthen the ability and incentives of private investors to exert governance over banks rather than to rely excessively on government regulators. These conclusions, however, are particularly tentative because more research is needed on how legal, regulatory, and supervisory policies influence the governance of banks. 2013-06-27T17:09:23Z 2013-06-27T17:09:23Z 2004-09 http://documents.worldbank.org/curated/en/2004/09/5168087/corporate-governance-banks-concise-discussion-concepts-evidence http://hdl.handle.net/10986/14239 English en_US Policy Research Working Paper;No.3404 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTING ASSET PRICES AUDITING BANK ASSETS BANK CAPITAL BANK CREDIT BANK FAILURES BANK HOLDING COMPANIES BANK LIABILITIES BANK REGULATION BANK REGULATORY AGENCIES BANK SUPERVISION BANKING CRISES BANKING INDUSTRY BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BOARDS OF DIRECTORS BONDS BORROWING CAPITAL ALLOCATION CAPITAL FORMATION CAPITAL MARKETS CAPITAL STANDARDS CAPITAL STRUCTURE CENTRAL BANKS COLLATERAL COMMERCIAL BANKS COMMON STOCK COMPETITIVENESS CONNECTED LENDING CONTRACT ENFORCEMENT CORPORATE CONTROL CORPORATE FINANCE CORPORATE GOVERNANCE CORPORATE OWNERSHIP CORRUPTION COST OF CAPITAL DEBT DEMAND DEPOSITS DEPOSIT INSURANCE DEPOSITORS DISCLOSURE LAWS DIVIDENDS ECONOMIC GROWTH ECONOMICS EFFECTIVE GOVERNANCE EMERGING MARKET ECONOMIES EQUITY MARKETS EXTERNALITIES FINANCIAL DEVELOPMENT FINANCIAL ECONOMICS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIATION FINANCIAL SECTOR FINANCIAL SYSTEMS FOREIGN BANKS GOVERNMENT BANKS GOVERNMENT GUARANTEES GOVERNMENT INTERVENTION GOVERNMENT POLICIES GUIDELINES INDUSTRIALIZED COUNTRIES INFORMATION ASYMMETRIES INFORMATION DISCLOSURE INFORMATIONAL ASYMMETRIES INSIDER LENDING INSURANCE INSURANCE COMPANIES INTEREST INCOME INTEREST RATES INVESTOR PROTECTION INVISIBLE HAND LAWS LEGAL SYSTEMS LENDERS OF LAST RESORT LIQUIDATION LIQUIDITY MARKET DISCIPLINE MATURITIES MEDIA MERGERS PENALTIES POLICY RESEARCH POLITICAL SYSTEM POLITICAL SYSTEMS POLITICIANS POOLS PRIVATE BANKS PRIVATE SECTOR PRIVATIZATION PRODUCTIVITY PUBLIC POLICY PURCHASES REAL ESTATE RISK TAKING SAVINGS SECURITIES SECURITIES MARKETS SHAREHOLDERS STATE BANKS STATE OWNED BANKS STATE OWNERSHIP SUBORDINATED DEBT TRANSACTION COSTS WARRANTS
spellingShingle	ACCOUNTING ASSET PRICES AUDITING BANK ASSETS BANK CAPITAL BANK CREDIT BANK FAILURES BANK HOLDING COMPANIES BANK LIABILITIES BANK REGULATION BANK REGULATORY AGENCIES BANK SUPERVISION BANKING CRISES BANKING INDUSTRY BANKING SECTOR BANKING SECTOR DEVELOPMENT BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BOARDS OF DIRECTORS BONDS BORROWING CAPITAL ALLOCATION CAPITAL FORMATION CAPITAL MARKETS CAPITAL STANDARDS CAPITAL STRUCTURE CENTRAL BANKS COLLATERAL COMMERCIAL BANKS COMMON STOCK COMPETITIVENESS CONNECTED LENDING CONTRACT ENFORCEMENT CORPORATE CONTROL CORPORATE FINANCE CORPORATE GOVERNANCE CORPORATE OWNERSHIP CORRUPTION COST OF CAPITAL DEBT DEMAND DEPOSITS DEPOSIT INSURANCE DEPOSITORS DISCLOSURE LAWS DIVIDENDS ECONOMIC GROWTH ECONOMICS EFFECTIVE GOVERNANCE EMERGING MARKET ECONOMIES EQUITY MARKETS EXTERNALITIES FINANCIAL DEVELOPMENT FINANCIAL ECONOMICS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIATION FINANCIAL SECTOR FINANCIAL SYSTEMS FOREIGN BANKS GOVERNMENT BANKS GOVERNMENT GUARANTEES GOVERNMENT INTERVENTION GOVERNMENT POLICIES GUIDELINES INDUSTRIALIZED COUNTRIES INFORMATION ASYMMETRIES INFORMATION DISCLOSURE INFORMATIONAL ASYMMETRIES INSIDER LENDING INSURANCE INSURANCE COMPANIES INTEREST INCOME INTEREST RATES INVESTOR PROTECTION INVISIBLE HAND LAWS LEGAL SYSTEMS LENDERS OF LAST RESORT LIQUIDATION LIQUIDITY MARKET DISCIPLINE MATURITIES MEDIA MERGERS PENALTIES POLICY RESEARCH POLITICAL SYSTEM POLITICAL SYSTEMS POLITICIANS POOLS PRIVATE BANKS PRIVATE SECTOR PRIVATIZATION PRODUCTIVITY PUBLIC POLICY PURCHASES REAL ESTATE RISK TAKING SAVINGS SECURITIES SECURITIES MARKETS SHAREHOLDERS STATE BANKS STATE OWNED BANKS STATE OWNERSHIP SUBORDINATED DEBT TRANSACTION COSTS WARRANTS Levine, Ross The Corporate Governance of Banks: A Concise Discussion of Concepts and Evidence
relation	Policy Research Working Paper;No.3404
description	The author examines the corporate governance of banks. When banks efficiently mobilize and allocate funds, this lowers the cost of capital to firms, boosts capital formation, and stimulates productivity growth. So, weak governance of banks reverberates throughout the economy with negative ramifications for economic development. After reviewing the major governance concepts for corporations in general, the author discusses two special attributes of banks that make them special in practice: greater opaqueness than other industries and greater government regulation. These attributes weaken many traditional governance mechanisms. Next, he reviews emerging evidence on which government policies enhance the governance of banks and draws tentative policy lessons. In sum, existing work suggests that it is important to strengthen the ability and incentives of private investors to exert governance over banks rather than to rely excessively on government regulators. These conclusions, however, are particularly tentative because more research is needed on how legal, regulatory, and supervisory policies influence the governance of banks.
format	Publications & Research :: Policy Research Working Paper
author	Levine, Ross
author_facet	Levine, Ross
author_sort	Levine, Ross
title	The Corporate Governance of Banks: A Concise Discussion of Concepts and Evidence
title_short	The Corporate Governance of Banks: A Concise Discussion of Concepts and Evidence
title_full	The Corporate Governance of Banks: A Concise Discussion of Concepts and Evidence
title_fullStr	The Corporate Governance of Banks: A Concise Discussion of Concepts and Evidence
title_full_unstemmed	The Corporate Governance of Banks: A Concise Discussion of Concepts and Evidence
title_sort	corporate governance of banks: a concise discussion of concepts and evidence
publisher	World Bank, Washington, D.C.
publishDate	2013
url	http://documents.worldbank.org/curated/en/2004/09/5168087/corporate-governance-banks-concise-discussion-concepts-evidence http://hdl.handle.net/10986/14239
_version_	1764430678532816896

The Corporate Governance of Banks: A Concise Discussion of Concepts and Evidence

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