Without Corporate Governance Banks Are Bound To Risk
CitationOkay, E. (2005). Without Corporate Governance Banks Are Bound To Risk. Strategic Management From National And Global Perspectives : The Proceedings of International Strategic Management Conference (pp. 485-492). Tübitak
Since the last decade, finance has undergone some major changes and there's no end to that transformation in sight. Principles like corporate governance and corporate control emerged as alternative disciplinary mechanisms. Nowadays, international financial aspect is to establish a reregulation process to prevent potential crises and risks from the financial markets. Banking -accepted as the corner-stone of financial system- is one of the main target of international authorities for the settlements on the financial area, Banking International Settlements leading this way is trying to improve corporate governance practices in banking systems around the world and increase the efficiency and transparency of the financial system. The regulation named as Basel II that is so special provides incentives to strengthen domestic supervision pushing banks to become more sophisticated in their management of risk, as suggested by Powell (2004). Therefore, banks are working to meet the new guidelines with corporate governance initiatives Emi are so special and important for them (Claessens, 2004). This paper provides an alternative analysis of Turkish banks by analysing the evolution of control and ownership. Most banks are floated by families or holding companies and for a majority of them control stays with the family long after the flotation. Ownership and performance of each bank are examined from the moment of the flotation (1999-2004) to five years later. The data suggest that the evolution of ownership depends on certain corporate characteristics of Turkish Banking System.