On 16th November 2009, SUERF, CEPS and the Belgian Financial Forum coorganized a conference "Crisis management at cross-roads" in Brussels. All papers in the present volume are based on contributions at the conference and the SUERF Annual Lecture which followed the event.

Banks are special, and so is the corporate governance of banks and other financial institutions as compared with the general corporate governance of non-banks. Empirical evidence, mostly gathered after the financial crisis, confirms this. Banks practicing good corporate governance in the...

The new regulatory framework imposes an increase in capital requirements for banks. Although core capital (equity) is more expensive than other liabilities (debt), it strengthens banks' stability and improves its loss-absorbing capacity. In this paper, we investigate the link between...

The capital structure of banks has become the focus of an extended debate among policymakers, regulators and academics. The seminal Modigliani-Miller (1958) theorem is seen as supportive of regulators' drive to require higher equity capital to banks. This raises the question on to what extent...

Banks allocate capital across business units while facing multiple constraints that may bind contemporaneously or only in future states. When risks rise or risk management strengthens, a bank reallocates capital to the more efficient unit. This unit would have generated higher constraint- and...

How do developments at lending institutions that alter the way they grant and monitor loans influence their borrowers' financial reporting quality (FRQ)? We examine this question by investigating the influence that privatizations of Chinese state banks (CSBs) had on the quality of their...

Corporate governance of banks and other financial institutions differs considerably from general corporate governance. For financial institutions the scope of corporate governance goes beyond the shareholders (equity governance) to include debtholders, insurance policy holders and other...

The returns on bank stocks rise and fall with the business cycle, making bank equity financing cheaper in the boom and dearer during a recession. This provides support for prudential tools that give incentives for banks to build capital buffers at times when the cost of equity is lower. In...

Corporate governance of banks differs considerably from general corporate governance. For banks the scope of corporate governance goes beyond the shareholders (equity governance) to include debtholders (debt governance). From the perspective of bank supervision debt governance is the primary...