Reviews for Bank Mergers: Current Issues and Perspectives

The average rating for Bank Mergers: Current Issues and Perspectives based on 2 reviews is 4 stars.

Review # 1 was written on 2016-09-29 00:00:00 Laura Bollinger A lawyer looks into the convoluted past and confused present of American corporate structures. He argues that what he calls the Berle-Means corporation (after their classic 1932 book "The Modern Corporation and Private Property"), where diffuse stockholders ("owners") are unable to control corporate CEOs and managers, was not an inevitable byproduct of enlarged industrial firms with an intense need for outside capital. Instead, he claims that there was always a potential counterweight to unaccountable managers, and that was large finance firms like insurance companies, banks, and pension plans, but that an unbelievable number of laws and regulations, often originating in an anti-financial animus, prevented these institutions from exerting any control and thus made modern American CEOs relatively unaccountable to the stockholding public. For instance, one of the first strong financial regulatory movements in the US was against what are today seen as no more than benign behomeths, life insurers. Yet in 1905 Charles Evan Hughes and the Armstrong Commission in New York succeeded in defanging these beasts by prohibiting their ownership of other company's stocks altogether, amidst much inflated rhetoric. Later, a myriad of laws like the McFadden Act and Glass-Steagall kept banks smaller in the US than in other countries, while the 1936 Revenue Act prevented mutual funds from controlling large shares of other companies. The Taft-Hartley Act Act of 1947 also prevented unions from running large pension funds. All of these laws may have emerged from fears of big finance or big union domination, but the end result was that US corporate managers rarely have to answer for poor performance because no institution owns enough stock to influence them. The author provides the instructive counterexamples of Germany and Japan, where large banks and insurers have larger stock holdings and more authority over their CEOs. Far too often the author feels the need to confront numerous alternative theories by reiterating facts and recovering ground, but this book is an eye-opening look at how small laws often have big effects on American companies and the American economy.

Review # 2 was written on 2017-05-22 00:00:00 Gaby Nunamaker What can you say about a classic? It persuasively demanded that corporate theorists recognize the place noneconomic political forces like populism and preference for local banking have played in making corporate governance what it is. I would be interested in finding an retrospective after the deregulation of the late 90s to see whether that has changed the situation.