However, events have demonstrated that these rules are indispensable when verifying the absence or ineffectiveness of self-imposed internal governance models. With the financial crisis, it was politically inevitable, as a result of the understandable social pressure, that the theme of banks’ internal governance moved from soft law to hard law.
In addition to managing such potential conflicts, governments have to be mindful of the financial risks to which they can be exposed in having ownership stakes in financial institutions.