This book investigates corporate governance practices of firms, in particular financial institutions, and their impact on the performance of these institutions. As such it will contribute to the debate on the importance of corporate governance for banks. The investigation will cover examples from developed and transition economies. Corporate scandals in the 1990s and 2000s drew the attention of governments to the importance of corporate governance, and induced legislation to prevent similar situations in the future. This work highlights the differences between corporate governance of firms and that of banks and investigates the nature of the relationship between corporate governance practices and performance of banks in the USA (as an example of a developed economy) and Kosova and Montenegro (as examples of South East European (SEE) transition economies). This work will also investigate the state of corporate governance in the two SEE countries and its developments since these countries became independent. Also, two methodological issues that have been ignored or not treated jointly by previous research: the endogenous and dynamic nature of Corporate Governance, are addressed.
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