Banking Governance within Company Interests and Prudential Regulation. (European Regulation and Specific Italian Rules)
Law and Economics Yearly Review, 2014
44 Pages Posted: 16 Sep 2014
Date Written: September 15, 2014
Abstract
This paper analyses banking governance by taking into account both company’s interests and prudential regulation. The focus on European regulatory framework and Italian rules allows us to understand the peculiar role of financial intermediaries. This is the reason why this regulation is aimed to ensure the soundness of banks’ activity and the transparency of their management policies. In particular, this research shows that the role of the board of directors and the board of auditors have been clarified by these rules, highlighting the importance of a consistent remuneration policy able to avoid risks. In conclusion, the analysis of the European and Italian legal framework does not dispel the doubt that, notwithstanding the new rules, politics – by interfering with internal corporate mechanisms – might continue to exert its influence over finance. On the other hand, we can argue that a good corporate governance could be a tool in order to overcome the difficulties of the third millennium.
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