The Evolution of Banking Legitimacy

This book examines how banking legitimacy has shifted from post‑war structural protection to today’s regime of reputational exposure shaped by shareholder activism, regulatory scrutiny, and public expectations. Drawing on comparative cases from the UK, US, and Japan, the book traces the erosion of inter‑bank solidarity, the rise of investor and social activism, and the resulting “governance paradox” whereby mechanisms designed to enhance accountability can undermine prudential stability. It proposes a framework of prudential alliances—adaptive, trust‑based cooperation among regulators, institutional investors, and banks—to enable regulated activism that reinforces rather than destabilises prudential governance. Through historical analysis (e.g., the Chemical Bank/Leasco episode), case illustrations (Barclays, Deutsche Bank, Wells Fargo, Mitsubishi UFJ; BNP Paribas, HSBC, JPMorgan), and an interpretive prudential matrix, the book shows how reputation functions as institutional capital and as the medium of contemporary financial governance. Bridging financial regulation, corporate governance, and political economy, this book will be of interest to scholars, policymakers, and practitioners particularly interested in shareholder activism and risk.