Italian banking regulation and the legal obstacles to corporate governance convergence

Abstract

An ongoing dispute in comparative corporate governance studies concerns the extent to which cross-country convergence towards, essentially, the shareholder primacy view is occurring. While some scholars, especially legal scholars and economists, have predicted (and sometimes advocated) a convergence of corporate governance practices towards the Anglo-American model of (seemingly) shareholder primacy, others sharply disagree and point to the persistence of stakeholder-oriented governance in many countries. Banking, from the point of view of corporate governance convergence, is an interesting industry, for at least two reasons: (i) banks are peculiar types of business organizations, entailing specific governance rules in most systems; (ii) banks are (monetary) financial intermediaries more and more active on capital markets, and thus more and more exposed to the isomorphic pressures generated on corporate governance by those markets. Thus, predictions on the convergence or divergence of banks’ corporate governance are not easy to make. The present paper aims to contribute to the scholarly dispute by analysing the Italian case, which has seen, over the past 30 years or so, an apparently unfettered process of transformation of banks’ governance and ownership towards the shareholder primacy model – a process epitomized by the recent reforms of the country’s cooperative banking sector. ‘Apparently’, because a closer look at the legal and regulatory bases of banks’ corporate governance actually shows many sources of divergence from the shareholder primacy model. Thus, the contribution proposed by the present study is twofold: first, it extends the ‘convergence’ discussion to the banking industry, where specific dynamics may help us better ‘test’ the hypotheses developed in the ‘convergence’ debate; second, it emphasizes alternative divergent patterns to those normally identified in the literature, where divergent ‘practice’ is often opposed to converging laws. Here, the sources of resistance to convergence are found in law itself.

High leverage detection in general functional regression models with spatially correlated errors

“…From an economical point of view, we can conclude that the selected leverage provinces correspond to places on which the impact of the bank transformations has had a negative effect. According to several conducted studies on this topic, there is a positive relationship to banks' increased ability to geographically diversify their risks (subsequent to de‐regulation) and, as a consequence, their greater willingness to supply credit to innovative firms 32 . According to this observation, the underlined three provinces present in this case an anomalous behaviour.…”

Í járngreipum hefðarinnar: Áhrif tæknibreytinga á lögmæti banka á Íslandi

“…Bankar verða fyrir baeði samkeppnis-og stofnana einsleitnikröftum frá eftirlitsaðilum og neytendum (Scott og Meyer, 1991). Kostnaður, meðal annars vegna fjártaekni (Groeneveld, 2020), og þörf fyrir fjármagn frá fjárfestum og viðskiptavinum (Butzbach og Rotondo, 2020) þvinga banka í átt að einsleitni vegna samkeppni. Reglur og staðlar sem bankar þurfa að fylgja til að fá starfsleyfi leiða til þvingunar einsleitni (Groeneveld, 2020;Kalmi, 2017;Lazarides og Drimpetas, 2016) og rannsókn á meðal portúgalskra banka gefur til kynna að hermun sé til staðar þar sem bankar líkja eftir öðrum bönkum til að stuðla að lögmaeti (Barreto og Baden-Fuller, 2006).…”