Citibank's and UBS's disastrous behavior reflects bad corporate governance—both ranked low on value-creation and ethical-culture measures before the crisis—made possible because banks are regulated to be relatively immune to corporate governance: the Bank Holding Company Act bars hedge funds and private equity from taking large controlling stakes, and the 1940 Act limits institutional investors to 1-2% ownership, so concentrated owners who would discipline management are largely prevented.
causalpending
Speaker
Charles CalomirisEvidence Quote
“we've set up large bank holding companies in the u.s. to be potentially the most undisciplined places for corporate governance in the world”
Created: 6/15/2026, 9:20:15 AM
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