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Taming the Tiger: solving the problems of banks. Why regulation and reforming ethics do not work and why there will be another banking crisis

Colley, Graham (2017) Taming the Tiger: solving the problems of banks. Why regulation and reforming ethics do not work and why there will be another banking crisis. Master of Law by Research (LLMRes) thesis, University of Kent,. (KAR id:68540)

Language: English
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Tigers, like banks, are kings in their jungle. Both survive because of their strength and both cause public fear when they 'run amok'. Mankind has always wished that it could tame tigers - and banks. Whilst banks are essential to an economy, this dissertation considers the desire to control the difficulties banks cause.

Using examples, it looks at the problems to which banks and bankers are prone. The traditional problem is of 'borrowing short and lending long', but the examples show other problems that have arisen, including those that led to the Financial Crisis 2007-2008. It is suggested that one cause of the problems of banks is of 'Financialisation' and, in particular, the demands of shareholders for 'Return on Equity'.

The dissertation considers two ways used to control banks. Firstly, it looks at regulation, with reference to the example of capital regulation. It outlines how equity capital appears on a bank's balance sheet, reviews the problems of capital regulation and concludes that bankers seek to circumvent or change regulations that hinder the aim to maximise profit. Secondly, having discussed the limits of regulation, it considers the alternative of changing organisational culture to improve the conduct of bankers. The dissertation looks at different approaches to such cultural change but concludes that the pressures to produce Return on Equity prevail over exhortations to act ethically.

The dissertation then considers whether shareholder control could ameliorate the problematic conduct of bankers and concludes that shareholders exacerbate the problem. Finally, the dissertation introduces the possible use of alternative legal structures, which are not subject to demands to provide Return on Equity. The dissertation suggests that such alternative legal structures present an area for future research.

Item Type: Thesis (Master of Law by Research (LLMRes))
Thesis advisor: Alessandrini, Donatella
Thesis advisor: Frame, Iain
Uncontrolled keywords: Banking Regulation , Capital requirements , Risk-Weighted Assets , procyclicality , Off Balance Sheet , Credit Rating Agencies , Credit Creation Theory , bank deposits , Ethics of Banking , Regulatory Standards , cultural change , Too-Big-to-Fail , TBTF , Culture of Insecurity , Psychology of a Banker , Return on Equity , Joint-Stock Bank , Borrowing , Liquidity Problem , Great Depression , Glass-Steagall , Northern Rock , Barings Overend, Gurney , Great Recession , Global Banking Crisis , Subprime , Lehman, Bischoff Report , Vickers Report , Greek Debt Crisis , LIBOR , Pujo , Charles Lindbergh , Pecora , Fair and Effective Markets Review , Wall Street Crash , Bagehot, Cooling out the Marks , Enron , Dodd-Frank , WorldCom Financialisation , Wall Street , Financialisation, Return on Equity , Wheatley Report , financialization , consumer credit , mortgage lending , building societies , Joe Kennedy , never-never , CRESC , Proprietary Trading , Business culture , dishonesty, Capital Adequacy , Bank for International Settlements , Capital requirement , Reserve Requirement, Leverage , Fractional Reserve Banking , liquidity crisis , Equity Capital , Deposit Guarantee , Basel Accords , Credit Ratings Agencies , Modigliani-Miller Theorem , CDO , collateralised debt obligation , Turner Review , Bank of England , Basel , Credit Creation Theory , Financial Intermediation Theory , Big Bang , shareholding democracy , demutualisation , Carney , Wheatley , Prudential Regulation Authority , Monetary intelligence theory , psychology of bankers , Cognitive Moral Development, Kohlberg , Moral Strength , Organisational Culture , Ethical Business Culture, Brexit ,Challenger Banks , Metro Bank , Trustee Savings Bank , Carpetbagger, Landesbanken , Sparkasse , Post Office Savings Bank , National Debt , National Girobank , Finance for Industry , Equity Capital for Industry , Wilson Committee
Divisions: Divisions > Division for the Study of Law, Society and Social Justice > Kent Law School
SWORD Depositor: System Moodle
Depositing User: System Moodle
Date Deposited: 10 Aug 2018 14:10 UTC
Last Modified: 09 Dec 2022 12:29 UTC
Resource URI: (The current URI for this page, for reference purposes)

University of Kent Author Information

Colley, Graham.

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