New dimensions of internal controls in banking after the GFC Cover Image

New dimensions of internal controls in banking after the GFC
New dimensions of internal controls in banking after the GFC

Author(s): Csaba Lentner, Laszlo Vasa, Pál P. Kolozsi, Zoltán Zéman
Subject(s): Supranational / Global Economy, Financial Markets
Published by: Institute of Society Transformation
Keywords: Internal Control; Banking Sector; Global Financial Crisis; GFC; Corporate Governance; Corporate Social Responsibility; CSR; CRM; RAR; CRD Directive; EBA; Basel Committee;

Summary/Abstract: The weakness of the control function of governments and central banks was the main regulatory cause of the global financial crisis (GFC) broke out in 2007, but the suboptimal regulatory environment «corrupted» the quality of internal control and audit of banks as well. After the crisis, corporate governance issues appeared in the focus of international organizations. In this paper, we present the relevant international recommendations aimed at improvement of the weak corporate governance practices of the banking sector. Based on the comparison of pre- and post-crisis internal control functionalities which are presented as a meta-analysis and a systematic review of the existing empirical researches, the authors conclude that the stricter guidelines could and can have a positive impact on banks’ operations stabilizing through the strengthening of internal control practices.

  • Issue Year: 176/2019
  • Issue No: 3-4
  • Page Range: 38-48
  • Page Count: 11
  • Language: English