THE INVOLVEMENT OF BANKERS IN THE CORPORATE GOVERNANCE OF NON-FINANCIAL FIRMS
THE INVOLVEMENT OF BANKERS IN THE CORPORATE GOVERNANCE OF NON-FINANCIAL FIRMS

Summary/Abstract: The core instability generated by a fractional-reserve banking system provides strong incentives for commercial banks to control the financial operations of large depositors as well as to supply financial support and even take the initiative towards the concentration of the industrial entities. Such an argument provides fresh insights regarding the historical trend of economic consolidations at the end of the XIXth century as well as what has been called financial capitalism. It argues that all the subsequent regulatory reactions missed a significant cause of the phenomenon of business consolidation in the global economy.

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