Regulating Multinational Banks

Abstract

This chapter explores multinational banks (MNBs). Between 2007 and 2009, the global economy experienced the global financial crisis, one of the most significant economic shocks in history, bringing into sharp relief the role of MNBs in its creation. While the MNB, as one type of multinational enterprise (MNE), is subject to the other rules and regulations discussed in this book, several important properties and characteristics show the additional rules and regulations applicable only to MNBs. In addition, the contribution of MNBs to the financial crisis raised doubts concerning the efficacy of existing regulatory rules, and the shortcomings of MNB corporate governance, leading to a reappraisal of both. The chapter tells the story of the crisis, including the role of the MNBs, outlines the regulatory regime as it stood before the crisis, and how the crisis has subsequently impacted on regulatory changes and MNB corporate governance. It concludes with an appraisal of the social and political effects of the crisis and of the future evolution of MNB regulation.