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Strong boards, ownership concentration and EU banks’ systemic risk-taking: Evidence from the financial crisis

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  • Battaglia, Francesca
  • Gallo, Angela

Abstract

We examine the effects of board composition and ownership on traditional measures of bank risk and proxies of bank tail and systemic risk. Both banks’ corporate governance shortcomings and systemic risk-taking have been recognized among the potential causes of the 2007 financial crisis. Yet, their interaction has received less attention so far. Based on a sample of 40 European banks over the period 2006–2010, we find that the boards ‘characteristics affect banks’ systemic risk, except for board independence and that this relation depends on capital regulations, banking systems’ ownership structures and bank activity restrictions.

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  • Battaglia, Francesca & Gallo, Angela, 2017. "Strong boards, ownership concentration and EU banks’ systemic risk-taking: Evidence from the financial crisis," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 46(C), pages 128-146.
    • Handle: RePEc:eee:intfin:v:46:y:2017:i:c:p:128-146
    DOI: 10.1016/j.intfin.2016.08.002
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    More about this item

    Keywords

    Board composition; Bank ownership; Systemic risk; Financial crisis;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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