The conflicts of interest and potential transfer of risks between a bank and its commercial firm owner are well documented in the literature, and as we all know, are also difficult to regulate and supervise.
Early this year Alan Greenspan raised this issue when he stressed the fact that large organizations increasingly manage their businesses on an integrated basis with little regard for the corporate boundaries that typically define the jurisdictions of supervisors. 1 For this reason, supervisors cannot properly monitor risks that cross legal entities, as some of them are not subject to financial regulation and supervision.