Corporate Governance & Risk Management in Financial Institutions: An International Comparison between Brazil and Germany

In this monograph, we have discussed various aspects of corporate governance and risk management from an international viewpoint and with a special focus on Brazil and Germany as well as banking, taking into account the developments since the beginning of the latest financial crisis in 2007/2008. Clearly, Brazil and Germany are quite different countries – culturally and economically. Still, there are some similarities, reflected for instance in total market capitalization of listed companies or the Open Budget Index. In terms of corporate governance, we could confirm that the general impression is still that of clear differences, but when looking deeper into the different topics, we found that diff erences are diminishing as Brazil is improving in these areas, while Germany appears to progress quite slowly. With regards to risk management, differences are perceived to be strong overall, but appear to be muted in the area of financial services, certainly due to strict and similar or even identical regulation (e.g. Basel III). Our analysis of data from surveys used for this study shows that there have been moderate increases in perceived quality, regulation and importance of both, risk management and corporate governance. This is largely true for both countries; still we found that especially regarding corporate governance, such increases have been lower or even non-existent in Germany. The reason might be that the Brazilian society feels a stronger necessity to improve in those areas than that of Germany, which might have started from a higher level. Still, the crises (financial and European sovereign) have had more impact – although still moderate – on Germany than on Brazil. The hypotheses that corporate governance and risk management had become more important over the 2007-2013 period could however not be fully confirmed, given that results of the analysis of annual reports did not produce consistent results. Agreement existed amongst participants in our survey that risk management is a part of corporate governance, although also here, affirmation from participants covering Germany was weaker than that from respondents working in Brazil. Consequently, we believe that risk management should be included as a section in its own right in those corporate governance codes where this is not yet the case today. This would also help to further strengthen the conceptual integration of risk management as part of corporate governance and might support the advancement of both. Furthermore, the establishment of risk-, advisory- and remuneration-committees (where not already in place) and Family Councils for family-owned businesses might be helpful to instill more discipline and achieve a higher internal independence. In summary, no major changes have been perceived to have taken place in the areas of corporate governance and risk management since the beginning of the financial crisis, while it is evident that a number of (regulatory) developments have occurred during t hat period. They may however have been relatively constant and were therefore, subjectively, less noted, or expectations had been higher so that the actions taken appear weak in the perception of our respondents

The P2 experiment

This article describes the future P2 parity-violating electron scattering facility at the upcoming MESA accelerator in Mainz. The physics program of the facility comprises indirect, high precision search for physics beyond the Standard Model, measurement of the neutron distribution in nuclear physics, single-spin asymmetries stemming from two-photon exchange and a possible future extension to the measurement of hadronic parity violation. The first measurement of the P2 experiment aims for a high precision determination of the weak mixing angle to a precision of 0.14% at a four-momentum transfer of Q^2 = 4.5 10^{-3} GeV^2. The accuracy is comparable to existing measurements at the Z pole. It comprises a sensitive test of the standard model up to a mass scale of 50 TeV, extendable to 70 TeV. This requires a measurement of the parity violating cross section asymmetry -39.94 10^{-9} in the elastic electron-proton scattering with a total accuracy of 0.56 10^-9 (1.4 %) in 10,000 h of 150 \micro A polarized electron beam impinging on a 60 cm liquid H_2 target allowing for an extraction of the weak charge of the proton which is directly connected to the weak mixing angle. Contributions from gamma Z-box graphs become small at the small beam energy of 155 MeV. The size of the asymmetry is the smallest asymmetry ever measured in electron scattering with an unprecedented goal for the accuracy. We report here on the conceptual design of the P2 spectrometer, its Cherenkov detectors, the integrating read-out electronics as well as the ultra-thin, fast tracking detectors. There has been substantial theory work done in preparation of the determination of the weak mixing angle. The further physics program in particle and nuclear physics is described as well.Comment: Invited EPJ A Manuscript, many figures, large file siz