BANK BEHAVIOUR AND RESILIENCE: THE EFFECT OF STRUCTURES, INSTITUTIONS AND AGENTS ‐ by Caner Bakir
| DOI | http://doi.org/10.1111/padm.12086 |
| Published date | 01 June 2014 |
| Author | Miguel Pina e Cunha |
| Date | 01 June 2014 |
doi: 10.1111/padm.12086
REVIEWS
BANK BEHAVIOUR AND RESILIENCE: THE EFFECT OF STRUCTURES, INSTITU-
TIONS AND AGENTS
Caner Bakir
Palgrave Macmillan, 2013, 232 pp., £65.00 (hb), ISBN 9780230202474
Banks are at the centre of value creation and destruction. The global financial crisis has
served as a reminder that far from being ’solid institutions’, banks should be regarded as
critical organizational actors within modern economies’ institutional ecology.
The crisis also showed that banks and the banking system are too important to be left
to regulate themselves, and this is where this book is especially powerful: it puts banks
in their institutional context, discussing how a healthy banking system results from a
network of institutional complementarities, in which divergent interests are negotiated
and balanced without any one stakeholder dominating others.
The above thesis results from a careful consideration of the banking system in a number
of important economies, with special interest for the case of Australia and for ‘Australian
exceptionalism’: why did the banking system in Australia manage to navigate through the
global financial crisis without a ripple? Regardless of one’s appreciation of exceptionalism,
discussing cases that diverge, either positively (as the case here) or negatively, will help
readers to understand why processes unfold in conceptually interesting ways.
Caner Bakir, a faculty member at Koc¸ University, avoids tempting dualistic explana-
tions, such as conservative vs. opportunistic behaviours, or patient vs. impatient capital,
to follow a more complicated and duality-sensitive explanation, where different interests
are articulated in a complex manner. According to Bakir, dualistic explanations are too
simplistic for such a complex reality. Instead, one needs to consider the interactions
among several structures, institutions, and agents to explain how some systems are more
stable than others.
The author uses the conceptual lens provided by institutional theory and emphasizes
the importance of focusing on the different interests of stakeholders. The resulting
explanation is that the stability of the banking systems depends upon a complex net of
institutional arrangements rather than on one single source, no matter how salient. For
example, short-termism and the culture of lavish bonuses associated with the chase for
over-optimistic returns (Financial Times 2012) can be relevant, but they are only a part of
the equation. The total picture is more complex than that.
Bakir emphasizes the interaction between structural variables (macroeconomic
structure, market structure, currency structure, and ideational structure), institutional
variables (prudential regulation/supervision, monetary policy, competition regulation/
supervision, tax policy, government subsidies, and the legal system), agency-level
enabling conditions (business model, organizational culture, corporate governance,
public sector actors, and politicians’ will to act), and outcomes (financial system resilience
and financial system fragility).
To defend the structure–institutions–agency interplay (SIA) the author starts with an
analysis of the sources of bank behaviour and institutional change, explaining the SIA
Public Administration Vol. 92, No. 2, 2014 (512–517)
©2014 John Wiley & Sons Ltd.
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