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Gender Quotas and Bank Risk

Author

Listed:
  • Rose C. Liao

    (Rutgers Business School, Rutgers University)

  • Gilberto Loureiro

    (NIPE/Center for Research in Economics and Management, University of Minho, Portugal)

  • Alvaro G. Taboada

    (Mississippi State University, College of Business)

Abstract

We assess the effects of board gender quota laws using a sample of banks from 39 countries. We document an increase in both stand-alone and systemic risk post-quota among banks that did not meet the quota prereform; the effect is stronger for banks in countries with a smaller pool of women in finance and low gender equality. We find that the propagation of poor governance practices by overlapping female directors and deterioration in the information environment post quota are likely channels driving the results. The evidence is consistent with some banks “gaming” the reform by strategically appointing insiders, which weakens the board’s monitoring function. Our results have policy implications and suggest that supply-side factors are key determinants of the outcome of mandated quotas.

Suggested Citation

  • Rose C. Liao & Gilberto Loureiro & Alvaro G. Taboada, 2022. "Gender Quotas and Bank Risk," NIPE Working Papers 9/2022, NIPE - Universidade do Minho.
    • Handle: RePEc:nip:nipewp:9/2022
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    File URL: http://repositorium.sdum.uminho.pt/handle/1822/79980
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    Cited by:

    1. Sophie Harnay & Fabienne Llense & Antoine Rebérioux & Gwenaël Roudaut, 2024. "Gender equality within boards: comparing quota and soft law," European Journal of Law and Economics, Springer, vol. 57(1), pages 1-35, April.

    More about this item

    Keywords

    Gender quotas; board of directors; stand-alone bank risk; systemic risk; risk management; board monitoring.;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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