Mario Bellomo
Monica Pellerone
 
Kore University of Enna, Via Cittadella Universitaria, Italy
DOI: https://doi.org/10.31410/ITEMA.2018.476

2nd International Scientific Conference on Recent Advances in Information Technology, Tourism, Economics, Management and Agriculture – ITEMA 2018 – Graz, Austria, November 8, 2018, CONFERENCE PROCEEDINGS published by the Association of Economists and Managers of the Balkans, Belgrade, Serbia; ISBN 978-86-80194-13-4

Abstract

Banks have an essential role in the development of the economy. The following characteristics of banks distinguish them from all other companies: opacity: the quality and characteristics of bank assets, and in particular of loans, are not easy to assess by outsiders; regulation: the banking sector is traditionally ruled in a very strict way; maturity and risk transformation: banks facilitate the matching between demand and supply of capital by making risk appetite and liquidity of the surplus units which offer funds (typically households) compatible with that of the deficit unit which ask for funds (typically companies); mitigation of the asymmetric information problems between surplus units and deficit units; negative externalities: crisis of a single intermediary can sometimes extend to the entire financial system turning a circumscribed problem to a situation of systemic instability.

This paper aims to review the recent academic research concerning the corporate governance (henceforth CG) in the banking sector along the following theme areas: a)study of the relation between the CG indicators and the performance of banks; b) investigating the relation between CG and the risk appetite of banks; c) study of the relation between the type of CG and performance or success of M & A.

The present paper suggests some ideas for future research by identifying some interesting areas which are little or unexplored at all. The first interesting theme area could be the study of the relationship between CG and the intensity of regulation/supervision on the banking sector. The presence of a strong governance and an effective internal control systems could make a strict regulation unnecessary, which on the one hand seems necessary to prevent abuse at the expense of competitors and investors, yet on the other could make the markets which adopt it unattractive. A second potential source of empirical research could be the analysis of the relation between CG parameters and types of funding instruments or types of lenders in order to figure out which is the most efficient form of financing and what kind of governance can attract a certain type of lender and / or the greater amount of funding in absolute terms.

Key words
Financial intermediation, Corporate finance, Banking Industry
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