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 paper investigates what we can learn from the financial crisis about the link between accounting and financial stability. The picture that emerges ten years after the crisis is substantially different from the picture that dominated the...Read more
The analysis of corporate governance has been a one-sided affair. The focus has been on “internal” accountability mechanisms, namely boards and shareholders. Each has become more effective since debates about corporate governance began in earnest...Read more
An important question in banking is how strict supervision affects bank lending and in turn local business activity. Forcing banks to recognize losses could choke off lending and amplify local economic woes. But stricter supervision could also...Read more
This Article analyzes the functioning of the European regulatory approach to the crisis of credit institutions, in the framework of EU banking supervision and in light of its early applications, with a special focus on bail-in. We investigate how...Read more