Title: Co-operative and Competitive Enforced Self Regulation: The Role ofGovernments, Private Actors and Banks in Corporate Responsibility.
Abstract:In considering why practices which stimulate incentives for private agents to exert corporate
control should be encouraged, this paper highlights criticisms attributed to government
control of banks...In considering why practices which stimulate incentives for private agents to exert corporate
control should be encouraged, this paper highlights criticisms attributed to government
control of banks. However the theory relating to the “helping hand” view of government is
advanced as having a fundamental role in the regulation and supervision of banks.
Furthermore, governments have a vital role to play in corporate responsibility and regulation
given the fact that banks are costly and difficult to monitor – this being principally attributed
to the possibility that private agents will lack required incentives or the ability to supervise
banks. Through its supervision of banks, governments also assume an important role where
matters related to the fostering of accountability are concerned – not only because banks may
have the power to affect firm performance, but also because some private agents are not able
to afford internal monitoring mechanisms.
Through the Enforced Self Regulation model, the paper attempts to highlight the role played
by government in the direct monitoring of firms. In proposing the Co-operative and
Competitive Enforced Self Regulation model, it attempts to draw attention to the fact that
although such a model is based on a combination of already existing models and theories, the
absence of effective enforcement mechanisms will restrict the maximisation potential of such
a model.
The primary theme of the paper relates to how corporate responsibility and accountability
could be fostered through monitoring and the involvement of governments in the regulation of
firms. It illustrates how structures which operate in various systems, namely, stock market
economies and universal banking systems, function (and attempt) to address gaps which may
arise as a result of lack of adequate mechanisms of accountability. Furthermore it draws
attention to the impact of asymmetric information (generally and in these systems), on levels
of monitoring procedures and how conflicts of interests which could arise between banks and
their shareholders, or between governments and those firms being regulated by the regulator,
could be addressed.Read More
Publication Year: 2011
Publication Date: 2011-01-04
Language: en
Type: article
Access and Citation
Cited By Count: 1
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