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Interaction between Ownership Structure and Systemic Risk in the European financial sector

Author

Listed:
  • Carlo Bellavite Pellegrini

    (Dipartimento di Politica Economica, DISCE,& Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore, Milano, Italy)

  • Rachele Camacci

    (Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore, Milano, Italy)

  • Laura Pellegrini

    (Dipartimento di Scienze Aziendali, Università di Bergamo, Bergamo, Italy - Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore, Milano, Italy)

  • Andrea Roncella

    (Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore, Milano, Italy)

Abstract

This paper aims to empirically test the interaction between systemic risk and corporate governance factors in the European banking framework on a balance panel data of 96 listed banks from 19 countries during the period 2011-2020. The purpose is to understand the role of a corporate governance’s specific issue for the systemic risk, throughtout a period that saw Europe been signed by financial turmoil’s long tail and the ‘whatever it takes’ recovery. Among the available possible governance features we focus on the ownership structure, as the literature shows that it affects the performance of the firm, both on profitability and risk. We choose the European context since its eterogeneity and the presence of a high level of institutional ownership. To measure systemic risk, we will adopt the CoVaR approach (Adrian and Brunnermeier, 2016). Our results show that ownership concentration decreases systemic risk over the period analized, meanwhile institutional investors’ high presence increases it.

Suggested Citation

  • Carlo Bellavite Pellegrini & Rachele Camacci & Laura Pellegrini & Andrea Roncella, 2023. "Interaction between Ownership Structure and Systemic Risk in the European financial sector," DISCE - Quaderni del Dipartimento di Politica Economica dipe0030, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    • Handle: RePEc:ctc:serie5:dipe0030
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    File URL: http://dipartimenti.unicatt.it/politica-economica-DIPE0030.pdf
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    References listed on IDEAS

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    1. Magda Fontana & Martina Iori & Fabio Montobbio & Roberta Sinatra, 2018. "A bridge over troubled water: Interdisciplinarity, Novelty, and Impact," DISCE - Quaderni del Dipartimento di Politica Economica dipe0002, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
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    More about this item

    Keywords

    Corporate Governance; Ownerhsip Structure; Institutional Investors; Systemic Risk;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • 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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