Professional Documents
Culture Documents
:tline of presentation
W Why care in general about corporate
governance (CG)?
W Why care speciIically about the CG oI banks?
W What is special about CG oI banks?
W What does this imply Ior bank CG,
regulation/supervision?
W What do we know about CG oI banks?
W mplications Ior CG oI banks
4
5
6
7
1 4 5 6
Eq:ity Rights
R
e
t
:
r
n
o
n
s
s
e
t
s
Excludes Mexico and Venezuela
a
n
a
d
a
h
i
l
e
o
l
o
m
b
i
a
D
e
n
m
a
r
k
E
g
y
p
t
F
i
n
l
a
n
d
F
r
a
n
c
e
G
e
r
m
a
n
y
G
r
e
e
c
e
H
o
n
g
K
o
n
g
n
d
i
a
n
d
o
n
e
s
i
a
r
e
l
a
n
d
s
r
a
e
l
t
a
l
y
J
a
p
a
n
J
o
r
d
a
n
K
e
n
y
a
K
o
r
e
a
R
e
p
.
O
f
M
a
l
a
y
s
i
a
M
e
x
i
c
o
N
e
t
h
e
r
l
a
n
d
s
N
o
r
w
a
y
P
a
k
i
s
t
a
n
P
e
r
u
P
h
i
l
i
p
p
i
n
e
s
P
o
r
t
u
g
a
l
S
i
n
g
a
p
o
r
e
S
o
u
t
h
A
f
r
i
c
a
S
p
a
i
n
S
r
i
L
a
n
k
a
S
w
e
d
e
n
S
w
i
t
z
e
r
l
a
n
d
T
a
i
w
a
n
T
h
a
i
l
a
n
d
T
u
r
k
e
y
U
n
i
t
e
d
K
i
n
g
d
o
m
U
n
i
t
e
d
S
t
a
t
e
s
V
e
n
e
z
u
e
l
a
Z
i
m
b
a
b
w
e
S
h
a
r
e
s
o
f
d
i
f
f
e
r
e
n
t
o
w
n
e
r
s
WideIy FamiIy State Fin Corp ther
6
Bank control internationally
1) Banks are generally not widely-held
) Family ownership oI banks is very important,
and so is the state ownership
) Cross-country diIIerences are large, though
W n 14 oI 44 countries, the controlling owner has more
than 50 oI voting shares. But in Australia, Canada,
reland, &K, and &S, either NO bank has a
controlling owner or the average is less than
4) Legal protection oI shareholder is associated
with more widely-held banks, i.e., with better
legal protection less need/desire Ior close control
CF Widely Family $tate Fin Corp ther
Co:ntry mean 27.45 25 39 14 7 2 14
7
Effects of control on firms and banks
W Some Iirm and bank owners can be better than others
W nsiders may expropriate Iirm resources
W Expropriation theIt, transIer pricing, asset stripping, nepotism, and
'perquisites that beneIit insiders
W Ownership & shareholder protection laws value
W Cash-Ilow rights up expropriation less valuation higher
W Shareholder protection laws better valuations up
W nteractions between ownership & protection valuation
W Are banks diIIerent?
W Laws insuIIicient with powerIul, complex, opaque banks?
W #egulations: laws superIluous or superceded?
W #ole oI ownership less important?
a
r
k
e
t
t
o
B
o
o
k
V
a
I
u
e