Governance and Regulation in Financial Markets and Institutions: Search for Resilience and Sustainable Markets

Shyam Sunder , Prem Sikka , Paul Williams and Thomas Clarke
Session Organizer:
Guler Aras
Guler Aras
Friday, 3 July 2015: 4:00 PM-5:30 PM
TW1.1.02 (Tower One)
After financial crisis we learned that irresponsible behavior not only deprives shareholders of long term returns and benefits but also ultimately imposes a cost on society as a whole. The global crisis has also presented the opportunity to seriously consider the understanding problems with the financial system.   Recent waves of market and institutions misbehavior have demonstrated the devastating consequences of excessive and ultimately destructive self-interest. Thus, as well as understanding the effects of corporate and financial institutions behavior on financial markets, such an understanding is also now imperative in relation to the social and environmental contexts.  Therefore financial crisis has been changed fundamentals of the financial market system and has raised a number of questions about the main functions of regulations and corporate governance. We understood that weak internal controls, insufficient board oversight, and lack of supervisory impact on corporate governance were detrimental to the sound business and financial markets.  After the financial crisis, all countries are more aware of the importance of strong governance structure and good governance system as well as necessary regulations. Corporate governance can be considered as an environment of trust, ethics, moral values and confidence that is the stakeholders, including government; the general public and the corporate sector.  For the financial markets to become sustainable and resilient to the socio-environmental and socio-economics challenges ahead, radical changes in corporate leadership need to take place.  It has been clear that financial institutions can no longer expect to engage in dubious or unethical behavior without risking their reputation and damaging, perhaps irrevocably, their market position. In this stage regulation and good governance principles is important to build more transparent, responsible, accountable and   sustainable financial markets and system. Financial markets are only sustainable if there is trust in the system, which requires minimum standards of ethics and integrity.  The main question is that how can we regulate these markets and institution and what kind of principles we need to implement for resilience and sustainable financial markets and institutions?  In this session we will discuss these questions with the contributions of several distinguished panellists.