Progression or regression: regulatory and governance challenges after the
global nancial crisis and Brexit editorial introduction
Editor Introduction
ItwasmypleasuretobetheguesteditorfortheJournal of Financial Regulation and
Compliance in its special report on corporate governance. Three of the articles were
specically focused on the banking sector, which continues to be at the forefront of
concern by investors, regulators, shareholders and politicians. The images of too big
to fail of 2007 bring concerns to all groups and questions continue to be unresolved on
how to best proceed. What has become clear since 2007 is that we continue to live in a
volatileuncertaincomplexambiguous world. As the world continues to reel from
the COVID 19 virus and governments spend billions to cushion businesses and
society in general, we face the stark reality of what could trigger a major recession/
depression and the potential harm that could wreak on the banking sector. As
governments spend hundreds of billions to cushion workers and businesses from the
pandemic, the importance of good governance needs to be at the forefront. One day
the world was worried about potential rising interest rates and the next interest rate is
almost zero. Questions of governance and cross-border regulations add to the need to
develop more rigorous governance structures that can work within the critical sector
of banking. Even with increased government spending, pressure is on the banks to
increase their risk portfolios to support businesses impacted by the virus. The three
authors all wrote their articles prior to the pandemic but the messages on banking
reform are more important than ever.
The banking sector is a complex global business. Author Jakob Schemmel in his
article, Regulating European nancial markets between crisis and Brexit,
addresses the combined issue of institutional framework reforms and the challenges
of doing this during a UK Brexit. Schemmel provides an excellent review and
summary of the complex world of the newly restructured European Supervisory
Agencies and how the amendments to their powers can and will impact the banking
sector including ongoing hurtles that need to be addressed. Christiane Hellsterns
paper Structural banking reforms and their implications for bankscorporate
governancelooks at the practical implications that new regulations and structural
reforms will have on both the industry and the boards that govern them. In her paper,
Hellstern draws an intriguing link back to the regulatory separation of 1933 after the
great depression. The article clearly maps out the current challenges faced by both
the organizations and boards as they try and separate out complex business units.
How reforms are done will impact how both boards and companies are managed and
potentially who is and should be on the board. Richard Ridyard in his article,
Carrots and sticks in bank governance: time for a bigger stick?,goes beyond the
regulatory issues and institutional reform and specically addresses the role of
senior management and board and shareholder accountability. Ridyard puts forward
that real reform requires a change of culture and accountability that can only be
Journalof Financial Regulation
Vol.28 No. 4, 2020
pp. 501-502
© Emerald Publishing Limited
DOI 10.1108/JFRC-07-2020-0064

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