Changing the culture of financial regulation: a corporate governance approach

Cairns, Steven Changing the culture of financial regulation: a corporate governance approach. PhD thesis, University of Liverpool.

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Abstract

The 2007-09 Global Financial Crisis has been described as the greatest crisis in the history of financial capitalism. The failure of the global financial system was triggered by the ‘Great American Real Estate Bubble,’ however it quickly developed into a global liquidity squeeze that left financial markets at the brink of collapse. The thesis argues that the general culture of banking prevalent at the time both caused and exacerbated the crisis. The Business Strategies were excessively risky, focusing on short-term gains, at the expense of financial security. It is therefore purported that to mitigate the risks of any future global financial crisis a fundamental change in the culture of banking is needed. Behavioural expectations and norms must be redefined and more prudent strategies inculcated. The thesis will show that the only way to hope to achieve such a cultural shift is to employ a holistic approach, encompassing supervision, regulation and crucially corporate governance mechanisms. Previous debates within the UK have tended to focus on macro and micro regulatory reform. However, it is purported that it was in many cases, risk monitoring and management practices within financial institutions that dramatically failed. Whilst prudential regulation is important, the thesis will show that it alone is insufficient to change the culture within the financial system; a multi-faceted approach is needed. The central argument to the thesis will show that corporate governance mechanisms must play a central part in the legal and regulatory response to the Global Financial Crisis, as part of a cohesive package of measures necessary to effect cultural change; it will do this by conducting a case study into the collapse and subsequent nationalisation of Northern Rock Plc.

Item Type:	Thesis (PhD)
Additional Information:	Date: 2014-09-30 (completed)
Subjects:	?? K1 ??
Depositing User:	Symplectic Admin
Date Deposited:	06 Aug 2015 10:08
Last Modified:	17 Dec 2022 00:47
DOI:	10.17638/02008505
URI:	https://livrepository.liverpool.ac.uk/id/eprint/2008505