Powers and Liability in the Bank
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Abstract
This paper analyzes corporate governance rules applicable to banks, particularly focusing on director's powers and liability. After describing the peculiarities of the banking business, we examine to what extent these characteristics affect general corporate rules when applied to bank organizations and with what operational impacts. We conclude that the system of director's powers, as applied to companies engaging in commercial activities, is more rigid and with increasing powers in the hands of non-executive directors compared to banks. The liability of directors, however, seems to be subject to a more limited scrutiny by courts and with a different application of the Business Judgment Rule.
Keywords
- Banking Activity
- Corporate Governance
- Business Judgment Rule