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.
This study examines the challenge of implicit communications - qualitative statements, tone, and non-verbal cues - to the effectiveness of enforcing corporate disclosure regulations. We use Regulation FD setting, given that SEC adopted the...Read more
Auditors play a major role in corporate governance and capital markets. Ex ante, auditors facilitate firms’ access to finance by fostering trust among public investors. Ex post, auditors can prevent misbehavior and financial fraud by corporate...Read more
Regulators generally have tried to address the problems posed by the excessive risk-taking of Systemically Important Financial Institutions (SIFIs) by placing restrictions on the activities in which SIFIs engage. However, the complexity of these...Read more
Retirement investing in the United States has changed dramatically. The classic defined-benefit (DB) plan has largely been replaced by the defined contribution (DC) plan. With the latter, individual employees’ decisions about how much to save for...Read more