Arbeitspapier
Crisis performance of European banks – does management ownership matter?
Failure in bank corporate governance has been seen as a contributing factor to excessive risk-taking pre-crisis with devastating implications as risks realised during the financial crisis. Unfortunately, the empirical evidence on the impact of managerial incentives on bank crisis performance is scarce. Moreover, bank strategy has not previously been accounted for. Hence, this paper presents novel findings on drivers for risk-taking and crisis performance. Specifically, I find a positive impact of management ownership in small diversified banks and non-traditional banks, the monitoring of which is challenging due to their opacity. The impact is negative in traditional banks and large diversified banks, indicating that shareholders induce managers to take risk where the safety net creates incentives for risk-shifting to debt holders and taxpayers. These findings have implications for both academic research as well as policy making particularly in the domain of corporate governance.
- ISBN
-
978-952-323-007-1
- Language
-
Englisch
- Bibliographic citation
-
Series: Bank of Finland Research Discussion Papers ; No. 28/2014
- Classification
-
Wirtschaft
Financial Crises
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Financial Institutions and Services: Government Policy and Regulation
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
Firm Performance: Size, Diversification, and Scope
- Subject
-
banks crisis performance
management ownership
traditional vs. nontraditional banking
diversification
safety net
bank opacity and complexity
- Event
-
Geistige Schöpfung
- (who)
-
Westman, Hanna
- Event
-
Veröffentlichung
- (who)
-
Bank of Finland
- (where)
-
Helsinki
- (when)
-
2014
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Westman, Hanna
- Bank of Finland
Time of origin
- 2014
Other Objects (12)
Does monetary union reduce employment?
Does housing allowance feed through into rental prices?
The euro crisis: a view from the North
How does domestic and foreign money growth affect the U.S. economy?
The banking crisis, banking policy regimes and the value of a bank
Domestic banks as lightning rods? Home bias and information during Eurozone crisis
Does relationship matter? The choice of financial advisors
Relationship lending and competiiton: higher switching cost does not necessarily imply greater relationship benefits
Central bank liquidity during the financial market and economic crisis: observations, thoughts and questions
Simulating the effects of imperfect credibility: How does the Peso problem affect the real economy?
Stock return on Scandinavian stock markets and the banking industry: Evidence from the years of financial liberalisation and banking crisis
Dynamic effects of demand and supply disturbances on the Finnish economy: Did liberalization of capital movements matter?
Does monetary union reduce employment?
Does housing allowance feed through into rental prices?
The euro crisis: a view from the North
How does domestic and foreign money growth affect the U.S. economy?
The banking crisis, banking policy regimes and the value of a bank
Domestic banks as lightning rods? Home bias and information during Eurozone crisis
Does relationship matter? The choice of financial advisors
Relationship lending and competiiton: higher switching cost does not necessarily imply greater relationship benefits
Central bank liquidity during the financial market and economic crisis: observations, thoughts and questions
Simulating the effects of imperfect credibility: How does the Peso problem affect the real economy?
Stock return on Scandinavian stock markets and the banking industry: Evidence from the years of financial liberalisation and banking crisis
Dynamic effects of demand and supply disturbances on the Finnish economy: Did liberalization of capital movements matter?
Does monetary union reduce employment?
Does housing allowance feed through into rental prices?
The euro crisis: a view from the North
How does domestic and foreign money growth affect the U.S. economy?
The banking crisis, banking policy regimes and the value of a bank
Domestic banks as lightning rods? Home bias and information during Eurozone crisis
Does relationship matter? The choice of financial advisors
Relationship lending and competiiton: higher switching cost does not necessarily imply greater relationship benefits
Central bank liquidity during the financial market and economic crisis: observations, thoughts and questions
Simulating the effects of imperfect credibility: How does the Peso problem affect the real economy?
Stock return on Scandinavian stock markets and the banking industry: Evidence from the years of financial liberalisation and banking crisis