Subprime crisis and board (in-)competence : private vs. public banks in Germany

Arbeitspapier

We examine evidence for a systematic underperformance of Germany's state-owned banks in the current financial crisis and study if the bank losses can be traced to the quality of bank governance. For this purpose, we examine the biographical background of 593 supervisory board members in the 29 largest banks and find a pronounced difference in the finance and management experience of board representatives across private and state-owned banks. Measures of boardroom competence” are then related directly to the magnitude of bank losses in the recent financial crisis. Our data confirms that supervisory board (in-)competence in finance is related to losses in the financial crisis. Improved bank governance is therefore a suitable policy objective to reduce bank fragility.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2640

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
• Subject: governance ; supervisory boards ; banking ; financial crisis ; Bankmanagement ; Aufsichtsrat ; Kompetenz ; Corporate Governance ; Vergleich ; Bankinsolvenz ; Öffentliche Bank ; Subprime-Hypothek ; Bankenkrise ; Finanzmarktkrise ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hau, Harald ; Thum, Marcel
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/30423
• Last update: 10.03.2025, 11:44 AM CET