Corporate governance in banks: Problems and remedies
JEL: G34, G21, G28, G00
banks, corporate governance, financial sector regulations and reform, risk management, board of directors accountability, directors remuneration, banks’ transparency
Weak and ineffective corporate governance mechanisms in banks are pointed out as the main factors contributing to the recent financial crisis. Deep changes in this area are necessary to reinforce the financial sector stability. The paper presents key aspects requiring reforms: the role, constitution and accountability of board, risk management, management remuneration, transparency. New regulations and guidance are presented, creating the foundations for a new order of the financial market. The paper also points out the banks’ stakeholders’ accountability.
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