Corporate and securities law may establish a duty of management and directors to limit regulatory violations, but the rationale for these duties is to protect shareholders from the consequences of regulatory violation, not directly to further the public regulatory objective. 6 The answer, I think, lies at least in part with the centrality and nature of risk in the activities of financial intermediaries.
Risk-taking – whether well- or ill-considered – is perhaps the central activity of all financial intermediaries. Where those intermediaries are significantly leveraged and engaged in maturity transformation, the risk-taking carries substantial potential societal consequences beyond the possible losses to investors, counterparties, and employees of the financial firm.