Bank capitalisation determines the probability of a bank failure. This column discusses how bank’s corporate governance affects its capitalisation. Corporate governance, in which the bank acts in the interest of its shareholders, is defined as a good one. Such governance, however, can lead to lower bank capitalisation. It also has possibly negative implications for financial stability.
Deniz Anginer, Asli Demirgüç-Kunt, Harry Huizinga, Kebin Ma, Sunday, November 10, 2013
Marco Onado, Tuesday, August 19, 2008
Many banks are raising fresh capital but not as fast as they are reporting fresh write-downs. Unless regulators push banks to rebuild their equity bases more quickly, the crisis will be more painful and protracted than necessary. Merrill Lynch is a salutary example.