FundRobot » Global Fund » how much influence do stakeholders have on banks? enough influence to make them change?

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Default influence do stakeholders have on banks enough influence to make them change

how much influence do stakeholders have on banks? enough influence to make them change? any proof? studying virgin money plc. THANKS!!

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Default influence do stakeholders have on banks enough influence to make them change

Ultimately the shareholders could exercise as much influence as they wished, sacking the directors or whatever. In practice that does not happen except in rare cases, partly because a large percentage of the shareholders are other financial institutions (fund managers and so on) and they don't see it as in their interest to force a different financial regime, partly because such dramatic action would undermine the value of the bank and hence the shareholder interest. There have however been subtle changes (at least in the UK) to force banks to be more responsible with their lending, to separate investment banking from branch banking, and to be less short termist. A key driver has been the bonus culture that has focussed on short term gains rather than long term business and that is slowly changing. Unfortunately investment banking is very much an international business and tends to follow the worst examples (highest bonus structures) worldwide so progress is slow.
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