Improving the governance of financial institutions

John Farrar

Research output: Chapter in Book/Report/Conference proceedingChapterResearchpeer-review

Abstract

The global financial crisis has challenged many of our assumptions about the contemporary financial systems in place in the developed economies. In the last decade or so we have seen the re- organization and transformation of the financial services sector. We assumed that in spite of market fluctuations, management of financial firms and the investors using these products basically understood their business, lines of authority were clear and followed, and adequate risk management systems and other internal controls were in place. The present crisis has shown that on the contrary this was not necessarily so. Banks have given credit to anyone who wanted it in fraudulent fashion. They have failed to handle risk effectively, with rating agencies not rating risk appropriately. Instead of expediting the flow of capital to industry they have frozen it to earn untold riches to the movers of financial contracts.
Original languageEnglish
Title of host publicationRegulatory Failure and the Global Financial Crisis
Subtitle of host publicationAn Australian Perspective
EditorsMahamed Ariff, John H Farrar, Ahmed M Khalid
Place of PublicationCheltenham, UK
PublisherEdward Elgar Publishing
Pages127-138
Number of pages12
ISBN (Print)9780857935328
DOIs
Publication statusPublished - 2012

Fingerprint

Financial institutions
Governance
Rating
Authority
Financial contracts
Risk management
Financial services
Internal control
Financial system
Investors
Management system
Service sector
Fluctuations
Retransformation
Global financial crisis
Reorganization
Rating agencies
Credit
Industry

Cite this

Farrar, J. (2012). Improving the governance of financial institutions. In M. Ariff, J. H. Farrar, & A. M. Khalid (Eds.), Regulatory Failure and the Global Financial Crisis: An Australian Perspective (pp. 127-138). Cheltenham, UK: Edward Elgar Publishing. https://doi.org/10.4337/9780857935335.00016
Farrar, John. / Improving the governance of financial institutions. Regulatory Failure and the Global Financial Crisis: An Australian Perspective. editor / Mahamed Ariff ; John H Farrar ; Ahmed M Khalid. Cheltenham, UK : Edward Elgar Publishing, 2012. pp. 127-138
@inbook{e3f364d6b8c24e1b85839cbf44d54452,
title = "Improving the governance of financial institutions",
abstract = "The global financial crisis has challenged many of our assumptions about the contemporary financial systems in place in the developed economies. In the last decade or so we have seen the re- organization and transformation of the financial services sector. We assumed that in spite of market fluctuations, management of financial firms and the investors using these products basically understood their business, lines of authority were clear and followed, and adequate risk management systems and other internal controls were in place. The present crisis has shown that on the contrary this was not necessarily so. Banks have given credit to anyone who wanted it in fraudulent fashion. They have failed to handle risk effectively, with rating agencies not rating risk appropriately. Instead of expediting the flow of capital to industry they have frozen it to earn untold riches to the movers of financial contracts.",
author = "John Farrar",
year = "2012",
doi = "10.4337/9780857935335.00016",
language = "English",
isbn = "9780857935328",
pages = "127--138",
editor = "Mahamed Ariff and Farrar, {John H } and Khalid, {Ahmed M}",
booktitle = "Regulatory Failure and the Global Financial Crisis",
publisher = "Edward Elgar Publishing",
address = "United Kingdom",

}

Farrar, J 2012, Improving the governance of financial institutions. in M Ariff, JH Farrar & AM Khalid (eds), Regulatory Failure and the Global Financial Crisis: An Australian Perspective. Edward Elgar Publishing, Cheltenham, UK, pp. 127-138. https://doi.org/10.4337/9780857935335.00016

Improving the governance of financial institutions. / Farrar, John.

Regulatory Failure and the Global Financial Crisis: An Australian Perspective. ed. / Mahamed Ariff; John H Farrar; Ahmed M Khalid. Cheltenham, UK : Edward Elgar Publishing, 2012. p. 127-138.

Research output: Chapter in Book/Report/Conference proceedingChapterResearchpeer-review

TY - CHAP

T1 - Improving the governance of financial institutions

AU - Farrar, John

PY - 2012

Y1 - 2012

N2 - The global financial crisis has challenged many of our assumptions about the contemporary financial systems in place in the developed economies. In the last decade or so we have seen the re- organization and transformation of the financial services sector. We assumed that in spite of market fluctuations, management of financial firms and the investors using these products basically understood their business, lines of authority were clear and followed, and adequate risk management systems and other internal controls were in place. The present crisis has shown that on the contrary this was not necessarily so. Banks have given credit to anyone who wanted it in fraudulent fashion. They have failed to handle risk effectively, with rating agencies not rating risk appropriately. Instead of expediting the flow of capital to industry they have frozen it to earn untold riches to the movers of financial contracts.

AB - The global financial crisis has challenged many of our assumptions about the contemporary financial systems in place in the developed economies. In the last decade or so we have seen the re- organization and transformation of the financial services sector. We assumed that in spite of market fluctuations, management of financial firms and the investors using these products basically understood their business, lines of authority were clear and followed, and adequate risk management systems and other internal controls were in place. The present crisis has shown that on the contrary this was not necessarily so. Banks have given credit to anyone who wanted it in fraudulent fashion. They have failed to handle risk effectively, with rating agencies not rating risk appropriately. Instead of expediting the flow of capital to industry they have frozen it to earn untold riches to the movers of financial contracts.

UR - http://www.scopus.com/inward/record.url?scp=84881715979&partnerID=8YFLogxK

U2 - 10.4337/9780857935335.00016

DO - 10.4337/9780857935335.00016

M3 - Chapter

SN - 9780857935328

SP - 127

EP - 138

BT - Regulatory Failure and the Global Financial Crisis

A2 - Ariff, Mahamed

A2 - Farrar, John H

A2 - Khalid, Ahmed M

PB - Edward Elgar Publishing

CY - Cheltenham, UK

ER -

Farrar J. Improving the governance of financial institutions. In Ariff M, Farrar JH, Khalid AM, editors, Regulatory Failure and the Global Financial Crisis: An Australian Perspective. Cheltenham, UK: Edward Elgar Publishing. 2012. p. 127-138 https://doi.org/10.4337/9780857935335.00016