The logic is that such a bifurcation of leadership of the board from the day to day running of the business will bring about more focus and vision as also the necessary thrust to the functioning of the top management of the bank. It will also provide effective checks and balances.
Looking ahead, it is crucial that supervisors and regulators reach a difficult balance between avoiding pro-cyclical credit restrictions and maintaining safe and forward-looking risk management practices. That said, the scale of the current crisis could nevertheless require extraordinary interventions in the banking sector.