Corporate Governance and Access to Finance - ESBG

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Figure 3. The interaction of the political and social systems (and other environmental elements) in the bankingsystem's Corporate GovernancePOLITICAL SYSTEMPOLITICAL SYSTEMSOCIAL SYSTEMSeparation of powersLegal systemRegulationSupervision/disciplineIncome distribution andpower concentrationEducation andexperienceAccess to capitalmarkets- Market normsAcquisition by foreignentities- Rules home countriesBanking crisis- Rules/normsimprovementExternal environmentof good governanceGood governance offinancial entitiesOwnership structureConflicts of interestsTransparency/stabilityBoard of Directors Management Audit StakeholdersSource: Own elaboration. Afi, Analistas Financieros Internacionales.44
As can be seen in the figure above, sound governance in financialinstitutions is closely linked to four aspects:1. The development of a political system based on a proper separation ofpowers, in which the legal system supports an appropriate regulationof banks, including their supervision and discipline to avoid excessiverisk-taking.2. A social system that creates an adequate environment for theavailability of sufficient human capital, with appropriate levels ofeducation and expertise to ensure the sound governance of bankingfirms. This needs to be accompanied by mechanisms to avoid anexcessive concentration of wealth and power.3. The ownership structure of financial institutions is a very relevantfactor in determining the potential conflicts of interest that may ariseamong owners and between them and the governing bodies.Transparency and stability of the ownership structure contributes,in general, to good Corporate Governance.4. Finally, the external environment may contribute to sound governance,specifically in areas such as: a) access to domestic or internationalcapital markets, to the extent that the rules or practices of thosemarkets reinforce sound governance; ii) the influence of foreignentities on the national banking system , when they import soundgovernance standards from their home countries to their subsidiariesor branches in the host countries, and this contributes to improvingthe overall standards of the country through emulation; or iii) theadoption of codes of conduct or the improvement of existing ones,very often as a reaction to banking crises.45
Page 6 and 7: BoxesBox 1. German Sparkassen 27Box
Page 9 and 10: EXECUTIVE SUMMARYBackground and obj
Page 11 and 12: nnAccess to Finance in enshrined in
Page 13 and 14: Chart A.Corporate Governance, Acces
Page 15 and 16: nThe study also shows that Corporat
Page 17 and 18: 1. INTRODUCTION1.1. Focus and objec
Page 19 and 20: WSBI members are by definition acco
Page 21 and 22: For the particular case of developi
Page 23 and 24: 2. THE LINK BETWEENCORPORATE GOVERN
Page 25: Table 2. Main features of the Missi
Page 28 and 29: Access to financeSparkassen promote
Page 30 and 31: All these examples illustrate how p
Page 32 and 33: In the case of Peru, the profits th
Page 34 and 35: Among the WSBI institutions that re
Page 36 and 37: BOX 2. KENYA POST OFFICE SAVINGS BA
Page 38 and 39: The fact that the banking system is
Page 41 and 42: 3. CORPORATE GOVERNANCE -CONCEPTUAL
Page 43: Figure 2. Sound Governance of Finan
Page 47 and 48: nnnAt the same time, the distance a
Page 49 and 50: The first two elements (the ownersh
Page 51 and 52: nHowever, this does not mean denyin
Page 53 and 54: Cooperatives are similar to mutuals
Page 55 and 56: 3.4. FoundationsFoundations do not
Page 57 and 58: 3.5. Good Corporate Governance prac
Page 59 and 60: F. DISCLOSURE AND TRANSPARENCYPrinc
Page 61 and 62: 4. ACCESS TO FINANCE -CONCEPTUAL FR
Page 63 and 64: 4.1. Financial deepening and improv
Page 65 and 66: The board does not have any executi
Page 67 and 68: In other words, sustainable financi
Page 69 and 70: The following table shows how the W
Page 71 and 72: The fourth dimension refers to the
Page 73: Table 8. Access to Finance in the f
Page 76 and 77: Only 27 members established in 21 c
Page 78 and 79: nnDCI (Depth of credit information
Page 80 and 81: 5.2. Corporate Governance and Acces
Page 82 and 83: 5.2.1. Corporate Governance and Ave
Page 84 and 85: Chart 8.Specific Corporate Governan
Page 86 and 87: 5.2.2. Corporate Governance and Ave
Page 88 and 89: Chart 13. Corporate Governance comp
Page 90 and 91: Chart 16. Corporate Governance Inde
Page 92 and 93: Chart 19. Specific Corporate Govern
Page 95 and 96:
ANNEX 1: REVIEW OFTHE LITERATUREThe
Page 97 and 98:
Even among the relatively narrow un
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Figure A.1. Structure of agents' re
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The table captures the essence of s
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A case study built by Clarke et al
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A very recent contribution to the d
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For example, in Latin America, WSBI
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The paper examines whether a poor e
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For the survival of microfinance in
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ANNEX 2: CASE STUDIES 32CASE STUDY
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It is one of the major characterist
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Although Sparkassen are legally and
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Figure A.2. Corporate Loans Market
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Financial education is also an impo
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Corporate GovernanceKPOSB is wholly
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Among the initiatives that the gove
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Related to the concession of credit
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OPERATIONS1. Deposit Base: It was p
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Corporate GovernanceThe Central Ban
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To address the problem of capital,
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Financial inclusion ranges very hig
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CASE STUDY 4:SPANISH SAVINGS BANKS
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The uniform financial regulation of
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Figure A.3. Governing Bodies - Span
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The web-based tool www.rededucacion
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On the liability side, CMAC offer m
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A specificity of CMAC is that the m
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Table A.3.MissionMissionCMAC AREQUI
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As of September of 2009, the twelve
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Furthermore, the consensus culture
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ANNEX 3: QUESTIONNAIREQUESTIONI. Ge
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ANNEX 4:THE HONOHAN INDEX 43COMPOSI
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COMPOSITE MEASURE OF ACCESS TO FINA
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ANNEX 5:QUANTITATIVE RESULTSCountry
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Overall Corporate Governance IndexO
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REFERENCES- Andrianova, S., Demetri
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- FSD Kenya (2009), Financial Secto
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- World Bank (2006) The Role of Pos
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WSBI - ESBG - The Global Voice of S
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