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Banking Sector Remains (literally) Unchanged

Posted By Barry Ritholtz On January 4, 2010 @ 10:15 am In Bailouts,Corporate Management | Comments Disabled

Ever wonder why the banking sector continues to operate as it always has?

Here’s a possible answer: According to a report on Corporate Governance by Professor Emma Coleman Jordan [1] of the Georgetown University Law Center (Public Directors Are Necessary to Restore Trust and Accountability at Companies Rescued by the U.S. Government [2]) one simple issue might help to explain why change has been so elusive at the bailed out banks: Their people.

Jordan notes that the folks who run the major banks today — the senior executives, directors, managers, etc. — are essentially the same exact folks [3] who ran them (into the ground) 5 and 10 years ago:

“The prospects for a robust prudently guided financial sector have been substantially clouded by the fact that the both the corporate governance structure and the executive leadership of the financial sector remain largely unchanged—92% of the management and directors of the top 17 recipients of TARP funds are still in office.”

You read that correctly — 92% of the TARP recipients’ senior management remains essentially unchanged post-crisis . . .

Hat tip HG

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Sources:
A Fair Deal for Taxpayer Investments [3]
Emma Coleman Jordan
Harvard Law School Program on Corporate Governance, September 24, 2009

http://blogs.law.harvard.edu/corpgov/2009/09/24/a-fair-deal-for-taxpayer-investments/

A Fair Deal for Taxpayer Investments: Public Directors Are Necessary to Restore Trust and Accountability at Companies Rescued by the U.S. Government [2]
Emma Coleman Jordan
American Progress, September 16, 2009

http://www.americanprogress.org/issues/2009/09/public_directorships.html


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2010/01/banking-sector-remains-literally-unchanged/

URLs in this post:

[1] Professor Emma Coleman Jordan: http://www.law.georgetown.edu/faculty/facinfo/tab_faculty.cfm?Status=Faculty&ID=270

[2] Public Directors Are Necessary to Restore Trust and Accountability at Companies Rescued by the U.S. Government: http://www.americanprogress.org/issues/2009/09/pdf/public_directors.pdf

[3] the same exact folks: http://blogs.law.harvard.edu/corpgov/2009/09/24/a-fair-deal-for-taxpayer-investments/

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