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Skilled Banker Mobility and Bank Default

Author

Listed:
  • Yuna Heo

    (University of Basel - Faculty of Business and Economics; Swiss Finance Institute)

  • Steven Ongena

    (University of Zurich - Department Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR))

Abstract

This study investigates the impact of skilled banker mobility risk on bank fragility. Using a novel measure of skilled banker mobility risk, we find that an increase in this risk raises the probability of bank default. The effect is more pronounced for banks facing higher competition and with a high proportion of non-performing loans. Further we show that labor mobility restriction laws can help mitigate the detrimental effect of skilled banker mobility risk. Our findings suggest that skilled banker mobility can exacerbate bank fragility, but proper policies can bolster resilience against possible adverse effects from labor market frictions.

Suggested Citation

  • Yuna Heo & Steven Ongena, 2025. "Skilled Banker Mobility and Bank Default," Swiss Finance Institute Research Paper Series 25-34, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2534
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    More about this item

    Keywords

    skilled banker; labor mobility; financial stability; distance-to-default; bank default probability; bank fragility;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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