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0:00
Hello, my name is
Azzim Gulamhussen.
I'm a Professor
of Financial Institutions
at the Vlerick Business School
in Brussels.
Today, I'm going to talk to you
about Corporate Governance
in Banking.
0:15
I will be covering
the following issues,
what are the reasons
for the recent interest
in Corporate Governance
in banking,
is corporate governance
in banking different
from the Corporate Governance
of non-financial firms,
how bank governance
works in practice,
the relevance of internal
and risk governance for banking.
After addressing these issues,
I will summarize the talk
and address some critical
challenges going forward
with corporate governance
in banking.
0:50
A first and obvious question
relates to the reasons
for the recent surge in interest
in the corporate
governance of banks.
Prior to this crisis,
failures in corporate
governance in banking
and their ultimate implications
for solvency and liquidation
where observed
in isolated situations.
Notable examples include
the Bank of Credit
and Commerce International
and the Baring Brothers.
In the case of Bank of Credit
and Commerce International,
the failure stemmed
from the complexity
and lack of disclosures
and transparency
of their cross-border
operations.
In the case of Baring Brothers,
their failure stemmed from
the lack of internal controls
in their identification
and quantification of risks
and also misaligned links
between short-term pay
and long-term
performance of the bank.
