**2. Literature review**

Furthermore, the subprime crisis started in the second half of 2006 with the crash of mortgage loans (mortgages) at risk in the United States (the subprime), which borrowers, often of a modest condition, were no longer able to repay. Revealed in February 2007 by the announcement of significant provisions passed by the HSBC bank, it turned into an open crisis when the periodic auctions did not find buyers in July 2007. Given the current accounting rules, it is impossible to give a value to these securities, which had to be provisioned at a value close to zero. Besides, policy makers have realized the extent and nature of this crisis belatedly, during the collapse of the prices of the various assets. The recent "subprime" crisis revealed some shortcomings in corporate governance and risk management. It also revealed failures of risk management throughout the business world. Since corporate governance is designed to reduce the information asymmetry and control of opportunism management, which is considered as a factor, this contributed to the recent crisis [5, 6]. The latter is crucial for both the developed and developing countries. The organization of power in the company is considered an important

*Financial Crises - A Selection of Readings*

factor in the stability of capital markets and investment dynamics.

regards.

**14**

the bank," although the first prevails.

In fact, risk management is widespread as a mode of governance and management control, although financial crisis has clearly shown its shortcomings. Based on the existing literature on risk management, we will argue that the global financial crisis provides ample opportunity to understand the rhetorical tactics informing about the discourse of risk management. Our research is based on a scientific debate about the relationship between risk management and corporate governance. Several studies showed that corporate governance failure and risk management are the primary causes of the 2008–2009 crisis. Inadequate risk management and inappropriate remuneration practices in the financial sector are placed squarely in the center of the financial crisis. Risk management presents the most important factor in the context of a set of practices and corporate governance structures. While most studies indicate that the weakness o corporate governance and inadequate risk management leads to the financial crisis, in particular, where there is insufficient risk oversight by the board of directors. For example, Working Group on Financial Regulation (2008)<sup>1</sup> mention in March just before the Bear Stearns collapse, "risk management feebleness at some large US and European financial institutions" as one of "the primary underlying causes of the turmoil in the financial markets." That report complains about "regulatory policies, including capital and disclosure requirements that failed to mitigate risk management weaknesses." They showed that the weak risk management in some major US and European financial institutions was the main causes of the global financial crisis. Other investigations indicate that the defeat in corporate governance is a major factor in the financial crisis. In this chapter, we focus on the French market and bring new light in various

First, France is based on concentration ownership, marked by family stockholders, even big, public companies [7]. In this area, Faccio and Lang [8] indicate that less than 14% of French companies are multi-participation, against to 37% in Europe in general; furthermore, 64.82% of French companies are controlled by a single family, compared to 44.29% in Europe. Also, Johnson et al. [9], France is different to other European countries, in the financial systems, since it comprises two systems, which are the following ones: "the central family" and the "based on

<sup>1</sup> See The President's Working Group on Financial Markets, "Policy Statement on Financial Markets," March 2008, https://ecgi.global/sites/default/files/working\_papers/documents/SSRN-id1448118.pdf
