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Bank management expertise and asset securitization policies

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Listed:
  • Chen, Tsung-Kang
  • Liao, Hsien-Hsing
  • Ye, Jing-Syuan

Abstract

We explore how the expertise of a bank holding company's management team affects its asset securitization policies. We find management team members with an MBA degree and top management experience securitize more low risk loans while those with core functional executive positions securitize fewer high risk loans. In addition, internal liquidity, governance quality, and risk management quality moderate these effects. Moreover, risk management concerns are the main driver of the negative effect of the percentage of core functional executives on asset securitization. We also provide evidence that core functional executives deem securitized mortgage loans riskier after the subprime crisis.

Suggested Citation

  • Chen, Tsung-Kang & Liao, Hsien-Hsing & Ye, Jing-Syuan, 2019. "Bank management expertise and asset securitization policies," Journal of Banking & Finance, Elsevier, vol. 109(C).
    • Handle: RePEc:eee:jbfina:v:109:y:2019:i:c:s0378426619302390
    DOI: 10.1016/j.jbankfin.2019.105667
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    Cited by:

    1. van der Plaat, Mark T., 2021. "How to Measure Securitization: A Structural Equation Approach," MPRA Paper 109735, University Library of Munich, Germany.
    2. Abdelsalam, Omneya & Elnahass, Marwa & Batten, Jonathan A. & Mollah, Sabur, 2021. "New insights into bank asset securitization: The impact of religiosity," Journal of Financial Stability, Elsevier, vol. 54(C).
    3. Abdelsalam, Omneya & Elnahass, Marwa & Ahmed, Habib & Williams, Julian, 2022. "Asset securitizations and bank stability: Evidence from different banking systems," Global Finance Journal, Elsevier, vol. 51(C).
    4. Chen, Tsung-Kang & Tseng, Yijie & Hsieh, Yu-Ting, 2023. "Firm location quality, founding family firms, and management team expertise," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 177-189.
    5. Maisam Ali & Christopher Gan & Muhammad Nadeem, 2023. "A CEO's expertise power and bank diversification," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 3815-3840, December.
    6. Wengerek, Sascha Tobias & Hippert, Benjamin & Uhde, André, 2022. "Risk allocation through securitization: Evidence from non-performing loans," The Quarterly Review of Economics and Finance, Elsevier, vol. 86(C), pages 48-64.

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    More about this item

    Keywords

    Asset securitization; Management team expertise; Bank holding companies; Internal liquidity; Risk management quality;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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