Corporate governance causes of the global financial crisis

© Cambridge University Press 2011. This chapter seeks to penetrate the catastrophe of the global financial crisis to examine its specifically corporate governance causes. The origins of the crisis in the enthusiasm for deregulation of financial institutions and markets, and the rapid growth of securitization, are explored. The huge explosion of global derivatives is considered as the context in which risk management and corporate governance were abandoned by major financial institutions. The role of the rating agencies and of executive incentives in encouraging rather than managing risk is investigated. Finally, the international effort to coordinate a regulatory response to the crisis is considered