ABSTRACT
The global financial crisis was a multidimensional, interconnected, and systemic crisis. The realization of the consequences of unchecked systemic risks for global markets has prompted national governments and international agencies into a major series of regulatory reforms and interventions in financial markets and institutions, the effect of which remains to be discerned. Firstly, there is a sense of the instability of the international financial economy and the inevitability of recurrent crises: Systemic crises, which are ubiquitous throughout financial history, are inevitable notwithstanding good faith regulatory efforts to avoid them. The recurrence of financial crises can be explained in at least four different but non-exclusive ways. Complex financial conglomerates give rise to considerable governance problems for boards seeking to monitor conflict of interest, manage risk, and provide appropriate incentives for executives. Dodd-Frank addresses the thorniest regulatory issues of all in the United States: corporate governance and executive compensation. Frequently, large financial institutions adopt a conglomerate structure to manage their many businesses.
