Author: David Schwartz J.D. CPA
A recent address by Federal Reserve Governor Daniel Tarullo has raised the specter of expanded fiduciary duties for bank directors. Referencing a recent academic paper proposing a simple negligence standard for expanded board oversight responsibility for risk-taking by systemically important financial institutions, Mr. Tarullo discussed how the nature of finance and financial regulation affects corporate governance and why, in turn, special corporate governance measures are needed as part of an effective prudential regulatory system.