Bank Corporate Government Assignment PDF
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Added on 2021-06-14
Bank Corporate Government Assignment PDF
Added on 2021-06-14
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BANK CORPORATE GOVERNANCE 1Bank Corporate GovernmentName:Institution:Instructor:Date:
BANK CORPORATE GOVERNANCE2Table of Contents1.0 Chapter one..........................................................................................................................31.1 Introduction..........................................................................................................................31.2 Scope of the study................................................................................................................42.0: Chapter Two........................................................................................................................62.1: Criticism of Financial Service Authority............................................................................62.2: FSA principles necessitating dismantling...........................................................................73.0: Chapter three.......................................................................................................................93.1: importance of a more comprehensive bank regulatory structure........................................93.2 Structuring a comprehensive bank regulatory system.........................................................93.3: Conclusion........................................................................................................................14Bibliography.............................................................................................................................16
BANK CORPORATE GOVERNANCE3BANK CORPORATE GOVERNANCE1.0 Chapter one1.1 IntroductionFinancial institutions are governed by rules and regulations which are set by theFinancial Services Authority under the corporate governance of the banking system.Corporate governance in the banking system intends to offer protection to all stakeholderswho in most cases cannot influence decision making. Efficient and effective mobilization andallocation of funds will economically decrease the cost of capital hence more capitalformation and productivity. Therefore, in cases where corporate banking is poorly governed anegative effect will be felt in the economy in terms of developments. This creates the essenceof having the FSA whose aim of setting standards for the financial institutions is to preventand forecast financial crisis likely to occur in future. It is important, therefore, that the corporate governance of the banking system bemade stronger and more comprehensive to be more effective. Dismantling of the FSA after afinancial crisis enables expansion of guidelines on the roles and duties of the supervisors whoensure that effective implementations are made on the risk management. Furthermore, it willgive a guideline to the bank supervisors will selecting the management which could furtherchange the means of management from the previous one which did not prevent the financialcrisis from occurring. Furthermore, a good corporate governance could have been in a position to prevent orcontrol the effects of a financial crisis that occurred globally. Due to the losses that wereexperienced it was necessary to dismantle the financial service authority in order to makebetter regulatory structures. This would increase the performance of the banking institutions,quick accessibility of the external financing which is affordable, as well as less cost of capital
BANK CORPORATE GOVERNANCE4which will ensure economic growth and financial stability. This is because corporategovernance has a direct effect on the developments of the capital market and the protection ofinvestors. Comprehensive and better regulations will help find investment and expansionfunds in the system hence developments.1.2 Scope of the studyFinancial service authority regulatory body was a name given to the securities andinvestment board in 1997. The major role of the regulatory body was to supervise the trade ofshares as well as the future of United Kingdom. In the year 2007-2008 the occurrence offinancial crisis led to the abolishment if the FSA for restructuring. The abolishment led to thecreation of two agencies which could responsibilities and they were the Financial ConductAuthority and the Prudential Regulation Authority. Regulation of the financial institution inmost cases is a difficult task thus requires a high profile duty. Therefore, it is important that acountry is governed by regulatory regimes capable to maintain the financial sector healthyand stable. 1 This is because financial institutions offer services of payment as well asfunding which form the focal point of economic development. Changes in the regulatorysystems in the financial sector are prone to change due to several financial crisis occurrenceswhich caused a lot of harm to the country. For instance, United Kingdom’s economy sufferedto a point where the government bailed out two large financial group while some other smallbanks were closed. 2 Thus a decline in the economic growth of the country which could notbe the cause is better measured had been taken to avoid and control the financial crisis.31Berger, Allen N., Björn Imbierowicz, and Christian Rauch. "The roles of corporate governance in bank failuresduring the recent financial crisis." Journal of Money, Credit and Banking 48, no. 4 (2016): 729-770.2William D. Coleman. Financial services, globalization and domestic policy change. Springer, 2016.3Gary L. Dagan. "The criminalization of the financial services industry through deregulation and decreasedenforcement." PhD diss., Utica College, 2015.
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