Corporate Governance in the Financial Service Industry

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Introduction This essay is about the corporate governance, regulation, leverage and incentives in the financial service industry. This essay also includes the UK credit crunch crisis and the global economic crisis. The UK economy is in recession. Due to fall in demand for goods and services reduce production and unemployment increases. A fall in demand has an effect on industries. In some case firms close down and loss of job increase. The world has become a small village due to the internet, leading to world competition. British market is suffering because costs of production are higher than in other parts of the world such as India and china. On the other hand, credit crunch due to bank failures. However, china and India have a healthy economic growth which benefit from the US financial crisis (© Emerald Group Publishing Limited, 2009). The bank of England main function is to control the money supply in the UK economy by manipulating interest rates. In case of recession the bank of England will continue to reduce the interest rates to encourage business to invest in plant and machinery and it will become cheaper for consumer to borrow which will finally lead to stimulating demand for goods and services and correcting the levels of unemployment as well as more goods and services to increase demand and employers will find it more profitable to employ more people (© Bank of England, 2009). The Bank of England financial system is plays an important part in the UK economy and modern life. This financial system is trying to bring together savers and investors, which will benefits themselves and the UK economy (© Bank of England, 2009). Corporate governance is a set of relationship between a company’s management, shareholde... ... middle of paper ... ...rporate Reporting: corporate governance, The combined code. 2nd Edition. United Kingdom Keinert.C (2008) Corporate Social Responsibility as International strategy . A Springer Company Sloman.J (2009) Economics and the Business environment: Demand and the consumer.2nd Edition. England. FT prentice Hall. Electronic journal databases Emerald Group Publishing Limited (2009) ‘Special Issue on changing patterns global growth’. Available at: http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=4F280BA70223188AC2C337BFF751580D?contentType=NonArticle&contentId=1747168 [Accessed: 06th November, 2009] Emerald Group Publishing Limited (2009) ‘What is corporate governance’? pp624.[online] Available at: http://www.emeraldinsight.com/Insight/ViewContentServlet?Filename=/published/emeraldfulltextarticle/pdf/2680070507.pdf [Accessed: 27th October, 2009]

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