Rescue cases involving guarantees (contrasted with restructuring cases) during the recent Financial Crisis, have illustrated the prominent position that the goal of promoting financial stability has ...assumed over that of the prevention or limitation of possible distortions of competition which may arise when granting State aid. The importance attached to maintaining and promoting financial stability-as well as the need to facilitate rescue and restructuring measures aimed at preventing systemically relevant financial institutions from failure, demonstrate how far authorities are willing to overlook certain competition policies. However, increased government and central bank intervention also simultaneously trigger the usual concerns-which include moral hazard and the danger of serving as long-term substitutes for market discipline. How far central banks and governments should intervene and how far distortions of competition should be permitted ultimately depends on how systemically relevant a financial institution is.
The primary argument of this article is, namely, that the International Accounting Standards Board (IASB) is in need of an enforcement mechanism. In drawing attention to this argument, the article ...not only proposes considerations which are to be taken into account if such a mechanism is to be implemented, but also considers areas in which the regulation of accounting standards, and auditing standards in particular, have contributed to the recent global financial crisis. The impact of such standards on pro-cyclicality, the level of success achieved by the IASB and other international standard setters, such as the Basel Committee on Banking Supervision, relates to how effectively the accounting and audit standard setting is implemented. As well as identifying the importance of convergence in contributing towards high quality audits and the consistent application of auditing and accounting standards, this article also acknowledges the difficulties and challenges encountered in attempting to achieve a convergent framework. Furthermore, through a discussion of recommendations aimed at consolidating transparency and accounting, as proposed by the G20, ways in which accounting standards, and, consequently, the IASB, could contribute further to the improvement of transparency and accountability of the framework for fair value measurements and evaluation, are considered. The absence of enforcement mechanisms, the fact that enforcement actions are carried out at national level in various EU Member States, present sources of obstacles to attempts to realise the proposals put forward by the G20. This article not only attempts to address such factors, but also to suggest ways in which the IASB, to an extent, could realise its goals. Through a consideration of two enforcement regimes in Europe, namely Germany and the UK, two related standards which govern enforcement in Europe, principles on which harmonisation of the institutional oversight systems in Europe may be achieved, and the vital contribution made by the Committee of European Securities Regulators and the European Financial Reporting Advisory Group, this article will consider how enforcement could be implemented by the IASB at a European level.
This paper not only considers why many concentrated ownership structured systems and jurisdictions are considering a shift to the Anglo American style of corporate governance, but also explores why ...the traditional principal agency theory may no longer hold in many concentrated ownership structures.
The primary argument of this article is, namely, that the International Accounting Standards Board (IASB) is in need of an enforcement mechanism. In drawing attention to this argument, the article ...not only proposes considerations which are to be taken into account if such a mechanism is to be implemented, but also considers areas in which the regulation of accounting standards, and auditing standards in particular, have contributed to the recent global financial crisis. The impact of such standards on pro‐cyclicality, the level of success achieved by the IASB and other international standard setters, such as the Basel Committee on Banking Supervision, relates to how effectively the accounting and audit standard setting is implemented. As well as identifying the importance of convergence in contributing towards high quality audits and the consistent application of auditing and accounting standards, this article also acknowledges the difficulties and challenges encountered in attempting to achieve a convergent framework. Furthermore, through a discussion of recommendations aimed at consolidating transparency and accounting, as proposed by the G20, ways in which accounting standards, and, consequently, the IASB, could contribute further to the improvement of transparency and accountability of the framework for fair value measurements and evaluation, are considered. The absence of enforcement mechanisms, the fact that enforcement actions are carried out at national level in various EU Member States, present sources of obstacles to attempts to realise the proposals put forward by the G20. This article not only attempts to address such factors, but also to suggest ways in which the IASB, to an extent, could realise its goals. Through a consideration of two enforcement regimes in Europe, namely Germany and the UK, two related standards which govern enforcement in Europe, principles on which harmonisation of the institutional oversight systems in Europe may be achieved , and the vital contribution made by the Committee of European Securities Regulators and the European Financial Reporting Advisory Group, this article will consider how enforcement could be implemented by the IASB at a European level.
Purpose The primary purpose of the paper is to demonstrate how corporate responsibility and accountability could be fostered through monitoring and the involvement of governments in the regulation of ...firms. Design/methodology/approach In considering why practices which stimulate incentives for private agents to exert corporate control should be encouraged, this paper highlights criticisms attributed to government control of banks. However, the theory relating to the “helping hand” view of government is advanced as having a fundamental role in the regulation and supervision of banks. Findings Governments have a vital role to play in corporate responsibility and regulation given the fact that banks are costly and difficult to monitor – this being principally attributed to the possibility that private agents will lack required incentives or the ability to supervise banks. Research limitations/implications Banks are costly and difficult to monitor – this being principally attributed to the possibility that private agents will lack required incentives or the ability to supervise banks. Practical implications The paper illustrates how structures which operate in various systems, namely, stock market economies and universal banking systems, function (and attempt) to address gaps which may arise as a result of lack of adequate mechanisms of accountability. Social implications The paper also draws attention to the impact of asymmetric information (generally and in these systems), on levels of monitoring procedures and how conflicts of interests which could arise between banks and their shareholders, or between governments and those firms being regulated by the regulator, could be addressed. Originality/value Through its supervision of banks, governments also assume an important role where matters related to the fostering of accountability are concerned – not only because banks may have the power to affect firm performance, but also because some private agents are not able to afford internal monitoring mechanisms.
Purpose - The purpose of this paper is not only seek to trace developments that have contributed to the importance of risk in regulation, but also to justify why risk has become so significant within ...regulatory and governmental circles.Design methodology approach - This task will be facilitated through a consideration of theories associated with risk, and by reference to two forms of risk regulation, namely risk-based regulation and meta regulation. As well as a consideration of the application of both in jurisdictions such as the UK, the paper adopts a comparative approach through references to the their application in jurisdictions such as Germany, Italy, and the USA, and also through a comparison between meta-regulatory strategies and risk-based regulation.Findings - This paper concludes that all regulatory strategies should take into consideration the importance of management responsibilities - both on individual and corporate levels. Meta-risk regulation has not only assumed such a prominent position in regulation through its application in Basel II, but also is preferred to risk-based regulation - not only because of the element of ambiguity which risk-based regulation introduces into its assessment (through a consideration of the external environment of the firm), but also because of its impact of the use of external auditors in regulation and supervision.Practical implications - The practical implications of a move towards risk-based regulatory strategies, and meta-regulatory strategies in particular, is that courts are simply not adequately equipped to deal with the pace with which some financial instruments, such as derivatives, operate.Originality value - This paper not only introduces originality through its comparative approach and the choice of jurisdictions involved, but also through the attention it draws to the need for more innovative techniques such as meta regulation. Meta regulation can be considered to be the most evolved and collaborative form of regulation, which is best suited for such an ever-evolving and changing regulatory environment that currently exists.
Abstract
The primary argument of this article is, namely, that the International Accounting Standards Board (IASB) is in need of an enforcement mechanism. In drawing attention to this argument, the ...article not only proposes considerations which are to be taken into account if such a mechanism is to be implemented, but also considers areas in which the regulation of accounting standards, and auditing standards in particular, have contributed to the recent global financial crisis. The impact of such standards on pro‐cyclicality, the level of success achieved by the IASB and other international standard setters, such as the Basel Committee on Banking Supervision, relates to how effectively the accounting and audit standard setting is implemented. As well as identifying the importance of convergence in contributing towards high quality audits and the consistent application of auditing and accounting standards, this article also acknowledges the difficulties and challenges encountered in attempting to achieve a convergent framework. Furthermore, through a discussion of recommendations aimed at consolidating transparency and accounting, as proposed by the G20, ways in which accounting standards, and, consequently, the IASB, could contribute further to the improvement of transparency and accountability of the framework for fair value measurements and evaluation, are considered. The absence of enforcement mechanisms, the fact that enforcement actions are carried out at national level in various EU Member States, present sources of obstacles to attempts to realise the proposals put forward by the G20. This article not only attempts to address such factors, but also to suggest ways in which the IASB, to an extent, could realise its goals. Through a consideration of two enforcement regimes in Europe, namely Germany and the UK, two related standards which govern enforcement in Europe, principles on which harmonisation of the institutional oversight systems in Europe may be achieved , and the vital contribution made by the Committee of European Securities Regulators and the European Financial Reporting Advisory Group, this article will consider how enforcement could be implemented by the IASB at a European level.
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