Italy: The butterfly effect
In March 2008, the Bank of Italy issued a supervisory regulation regarding Italian banks' and bank holding companies' internal organisation and corporate governance. The regulation was an implementation of guidelines set in August 2004 by the minister of economic affairs on the principles banks and other financial intermediaries should follow when adopting the governance systems introduced in the 2004 corporate law reform. In fact, since 2004 Italian stock corporations have been given the option to adopt, in addition to the traditional Italian model (based on a board of directors and a board of statutory auditors with technical oversight powers), either a one-tier or two-tier governance and supervisory structure.. The regulation aims both to provide guidance to banks on how to implement the governance model and to safeguard the sound and prudent management of banks. The deadline to adopt the new principles is June 30, 2009. The level of detail and the prescriptive nature of the provisions have been criticised by commentators because of the significant restrictions imposed on the banks' ability to freely implement the governance systems provided for under Italian corporate law.
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