Subsidiarity portfolios and separation compacts to enhance the governance of state-owned banks

Rodolfo Apreda ()

No 317, CEMA Working Papers: Serie Documentos de Trabajo. from Universidad del CEMA

Abstract: This paper sets forth a new approach to state-owned banks grounded on portfolio theory and the principle of subsidiarity, so as to improve the governance of such institutions. Firstly, it defines what is meant by portfolio of portfolios and the separation feature, which leads to setting up what we call a separation compact. Next, the principle of subsidiarity is introduced, highlighting the pathways to its uses and misuses when we deal with state-owned banks. Afterwards, we bring forward the notion of subsidiarity portfolio, stressing how such construct can foster to a great degree key governance variables, namely accountability, control, transparency, management, checks and balances, as well as the fulfillment of the fiduciary role. Finally, it is laid down a new viewpoint for state-owned banks, from which they come to be regarded as separation compacts.

Keywords: state-owned banks; portfolios; governance; principle of subsidiarity; separation compact; subsidiarity portfolios (search for similar items in EconPapers)
JEL-codes: H10 H20 H5 G11 G21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fin, nep-fmk and nep-pbe
Date: 2006-02
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Persistent link: http://EconPapers.repec.org/RePEc:cem:doctra:317

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