Sarbanes-Oxley must reduce bank failures, says FDIC inspector-general

Washington, DC - - The Office of the Inspector-General at the Federal Deposit Insurance Corporation (FDIC) is hoping that the Sarbanes-Oxley Act would help reduce costly bank failures in the country.

Inadequate corporate governance is at the heart of the most costly bank failures, according to Gaston Gianni, FDIC inspector-general, who is responsible for analysing and reporting FDIC’s management and performance challenges. Gianni said that in two material loss reviews completed in 2003, as well as other material loss reviews conducted since 1993, it was concluded that ineffective corporate governance was the primary cause.

In his testimony to the hearing on oversight of the FDIC to the

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