Corporate governance in banks following the financial crisis: An institutional perspective on changes in the banking sector

Björn Källén & Tobias Nordblom

Student thesis: Master thesis

Abstract

This thesis investigates the effect of change in the institutional environment on governance practices in the banking sector following the financial crisis of 2008. We consider systemically important banks in North America and Europe at three points in time to search for trends in corporate governance systems and relate the developments to changes in regulative, normative and cultural-cognitive institutions. The analysis and the discussion build upon agency theory, stakeholder theory and new institutional theory, and we combine quantitative and qualitative findings in a method inspired by clinical research in finance. Our results indicate a shift in corporate governance practices following the financial crisis. The changes span across several categories within banks’ governance system, and we argue that the coincidence of these developments and changes in the institutional environment support a perspective where agency theory is complemented with stakeholder theory and new institutional theory. We discuss how several facets of the institutional environment, spanning beyond the formal, have affected banks in a meaningful way and we argue that stakeholders have been successful in making their demands heard through institutional mechanisms.

EducationsMSc in Applied Economics and Finance, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2013
Number of pages127