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Financial Markets and Portfolio Management

, Volume 30, Issue 1, pp 1–17 | Cite as

Reputational risks and large international banks

  • Ingo WalterEmail author
Article
  • 486 Downloads

Abstract

The paper considers the causes, costs and consequences of reputational risk in large international financial institutions. A conceptual strategic positioning model focusing on clients, products and geographic arenas is superimposed on a flow of funds model based on the key financial intermediation functions. This nexus is used to identify important areas of reputational risk, which are then documented in an inventory of adverse events in recent banking history, and explained in terms of behavior failures in compliance, public expectations and behavioral norms. This framework is then used to position empirical studies of reputational risk in the literature, and a normative discussion of reputational risk governance and bank culture.

Keywords

Reputational risk International banking Conflicts of interest   Bank regulation Market discipline Risk governance 

JEL Classification

G20 G21 G28 

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Copyright information

© Swiss Society for Financial Market Research 2016

Authors and Affiliations

  1. 1.Seymour Milstein Professor Emeritus of Finance, Stern School of BusinessNew York UniversityNew YorkUSA

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