What is it about?
At the international level, guidelines have been laid down as to the governance and management of risk in financial institutions, as a response to weaknesses in these areas that were observed during the global financial crisis of 2007-2009 (GFC). The European Union (EU) and the United Kingdom (UK) have legislated over these areas. The former permits some national flexibility in the governance of banks and investment firms - possibly to accommodate the 'comply or explain' basis of corporate governance that is operated within the UK.
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Why is it important?
The GFC revealed shortcomings in the management of firms within the sector. The chapter considers ways in which standard-setters and legislators are addressing these difficulties.
Perspectives
This chapter considers a specific aspect of the legislative response to the GFC. It illustrates the three-tiered approach to law-making within the internal market of the EU - as it applies to the financial sector since the GFC: international - EU - Member State. Although the specific context may become of historic interest, due to the UK's departure from the EU (depending on the outcome of future negotiations between these parties), it may be of illustrative value to financial market participants in countries within a three-tiered legislative system - i.e. international - regional - country.
Dr Graeme Baber
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This page is a summary of: Responsibility and accountability in the financial sector, Edward Elgar Publishing,
DOI: 10.4337/9781783475797.00031.
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