The Management Ownership Structure and Risk-taking Behavior of U.S. Commercial Banks
Author : Helena Mary Mullins
Publisher :
Page : 202 pages
File Size : 39,70 MB
Release : 1990
Category :
ISBN :
Impact of Ownership Structure and Regulation on the Risk-Taking Behavior of Depository Institutions
Author : M. Kabir Hassan
Publisher :
Page : pages
File Size : 31,42 MB
Release : 2006
Category :
ISBN :
Book Description
This paper presents an analysis of the impact of ownership structure and regulation on the risk-taking behavior of commercial banks and savings and loans. Our work differs from previous efforts in that we measure risk in terms of an institution's asset or business risk, using the Ronn-Verma option-pricing methodology, as well as its equity risk. Our work is also unique in that we have incorporated dummy variables into our empirical model which enables us to test risk-taking differentials between commercial banks and savings and loans, as well as risk-taking differentials between federally and state chartered institutions.
Risk-Taking Behavior and Management Ownership in Depository Institutions
Author : Thomas L. Steiner
Publisher :
Page : pages
File Size : 22,12 MB
Release : 1998
Category :
ISBN :
Book Description
We examine the relation between risk and ownership structure among depository institutions. The empirical results provide evidence that the relation between ownership by managers and various measures of depository institution risk is negative and significant suggesting that as managerial ownership increases, the level of risk-taking decreases. This finding, which supports a risk aversion hypothesis, is consistent across several risk measures. Furthermore, we document greater risk and greater risk aversion for savings institutions relative to commercial banks.
The Management Reward Structure and Risk-taking Behaviour of U.S. Commercial Banks
Author : Helena Mullins
Publisher :
Page : 25 pages
File Size : 31,60 MB
Release :
Category : Banks and banking
ISBN :
Book Description
Ownership Structure and Risk in Publicly Held and Privately Owned Banks
Author : Thierno Barry
Publisher :
Page : pages
File Size : 38,10 MB
Release : 2014
Category :
ISBN :
Book Description
Using detailed ownership data for a sample of European commercial banks, we analyze the link between ownership structure and risk in both privately owned and publicly held banks. We consider five categories of shareholders that are specific to our dataset. We find that ownership structure is significant in explaining risk differences but mainly for privately owned banks. A higher equity stake of either individuals/families or banking institutions is associated with a decrease in asset risk and default risk. In addition, institutional investors and non-financial companies impose the riskiest strategies when they hold higher stakes. For publicly held banks, changes in ownership structure do not affect risk taking. Market forces seem to align the risk-taking behavior of publicly held banks, such that ownership structure is no longer a determinant in explaining risk differences. However, higher stakes of banking institutions in publicly held banks are associated with lower credit and default risk.
Bank Ownership Structure, Market Discipline and Risk
Author : Thierno Barry
Publisher :
Page : 27 pages
File Size : 19,26 MB
Release : 2012
Category :
ISBN :
Book Description
The objective of this paper is to analyze the influence of ownership structure on the risk taking behavior of European commercial banks. We consider five categories of shareholders (managers/directors, institutional investors, non financial companies, individuals and families, and banks). Controlling for various factors, we find that asset risk is lower for banks where a higher proportion of total stocks is held by families and individuals who have less diversified portfolios. We also find that the probability of default of banks is higher when non financial companies or institutional investors hold a higher proportion of total equity. However, these results do not hold for listed banks in which non financial companies hold higher stakes suggesting that the market might be limiting the risk-taking incentives of such shareholders. We further show that market forces might be more effective in influencing risk in banks with a higher involvement of non financial companies than in banks with a higher portion of stock held by institutional investors.
Bovernance and Bank Valuation
Author : Gerard Caprio
Publisher : World Bank Publications
Page : 49 pages
File Size : 43,46 MB
Release : 2003
Category : Bancos
ISBN :
Book Description
"Which public policies and ownership structures enhance the governance of banks? This paper constructs a new database on the ownership of banks internationally and then assesses the ramifications of ownership, shareholder protection laws, and supervisory/regulatory policies on bank valuations. Except in a few countries with very strong shareholder protection laws, banks are not widely held, but rather families or the State tend to control banks. We find that (i) larger cash flow rights by the controlling owner boosts valuations, (ii) stronger shareholder protection laws increase valuations, and (iii) greater cash flow rights mitigate the adverse effects of weak shareholder protection laws on bank valuations. These results are consistent with the views that expropriation of minority shareholders is important internationally, that laws can restrain this expropriation, and concentrated cash flow rights represent an important mechanism for governing banks. Finally, the evidence does not support the view that empowering official supervisory and regulatory agencies will increase the market valuation of banks"--NBER website
Market Structure, Capital Regulation and Bank Risk Taking
Author : Patrick Behr
Publisher :
Page : 0 pages
File Size : 38,77 MB
Release : 2009
Category :
ISBN :
Book Description
This paper discusses the effect of capital regulation on the risk taking behavior of commercial banks. We first theoretically show that capital regulation works differently in different market structures of banking sectors. In lowly concentrated markets, capital regulation is effective in mitigating risk taking behavior because banks' franchise values are low and banks have incentives to pursue risky strategies in order to increase their franchise values. If franchise values are high, on the other hand, the effect of capital regulation on bank risk taking is ambiguous as banks lack those incentives. We then test the model predictions on a cross-country sample including 421 commercial banks from 61 countries. We find that capital regulation is effective in mitigating risk taking only in markets with a low degree of concentration. The results remain robust after accounting for financial sector development, legal system effciency, and for other country and bank-specific characteristics.
Bank Leverage and Monetary Policy's Risk-Taking Channel
Author : Mr.Giovanni Dell'Ariccia
Publisher : International Monetary Fund
Page : 41 pages
File Size : 47,83 MB
Release : 2013-06-06
Category : Business & Economics
ISBN : 1484381130
Book Description
We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s loan portfolio) is negatively associated with increases in short-term policy interest rates. This relationship is less pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and economic distress. These results contribute to the ongoing debate on the role of monetary policy in financial stability and suggest that monetary policy has a bearing on the riskiness of banks and financial stability more generally.
Corporate Governance and Bank Performance
Author :
Publisher : World Bank Publications
Page : 43 pages
File Size : 31,82 MB
Release : 2005
Category : Banks and banking
ISBN :
Book Description
Abstract: "The authors jointly analyze the static, selection, and dynamic effects of domestic, foreign, and state ownership on bank performance. They argue that it is important to include indicators of all the relevant governance effects in the same model. "Nonrobustness" checks (which purposely exclude some indicators) support this argument. Using data from Argentina in the 1990s, their strongest and most robust results concern state ownership. State-owned banks have poor long-term performance (static effect), those undergoing privatization had particularly poor performance beforehand (selection effect), and these banks dramatically improved following privatization (dynamic effect. However, much of the measured improvement is likely due to placing nonperforming loans into residual entities, leaving "good" privatized banks."--World Bank web site.
