Using a sample of 3,788 firms from 23 developed countries for the period 1984-2003, we show that the more open the economy the more exposed are its firms to exchange rate movements, and this relation holds after controlling for firm size, industry and several financial variables.

In autumn of 2007 Britain experienced its first bank run of any significance since the reign of Queen Victoria. The run was on a bank called Northern Rock. This was extraordinary, for Britain had been free of such episodes because by early in the third quarter of the 19th century the Bank of England had developed techniques to prevent them. A second extraordinary aspect of the affair was that it was the decision to provide support for the troubled institution that triggered the run. And thirdly, unlike most runs in banking history, it was a run only on that one institution. This paper considers why the traditional techniques for the maintenance of banking stability failed - if they did fail - and then considers how these techniques may need to be changed or supplemented to prevent such problems in the future. The paper starts with a narrative of the events, then turns to banking policy before the event and to the policy responses after it. We suggest both why the decision to provide support triggered the run and why the run was confined to a single institution. That prepares the way for our consideration of what should be done to help prevent the recurrence of such episodes in the future.

This essay identifies some key issues for the analysis of corporate governance based on the articles within this special review issue coupled with our own perspectives. Our aim in this issue is to distil some research streams in the field and identify opportunities for future research. Our analysis suggests that analytic and regulatory approaches to corporate governance issues should move from a 'one-size-fits-all' template to taking into account organizational, institutional and national contexts.

This paper presents a review of the recent literature in banking around the core themes of performance, risk and governance of financial institutions. We write this review against the backdrop of the recent financial crisis and the major changes it caused to banking sectors in many countries. There are several themes emerging from this review, but the overarching issue relates to the need to better understand bank risk taking incentives and the implications for systemic stability. There is a need for more work on the role of safety net subsidies and how these are linked to systemic risk; financial innovation and the adoption of new products and processes and the linkage to risk-taking, market returns or contagion. There is also a need to better understand the relationship between competition and risk, and understand the interconnections between capital, profitability, liquidity and risk.