= Requires subscription
Book/Report Reviews
Corporate governance, regulation and bank risk-taking
Federal Reserve Bank of New York Corporate Finance of Financial Intermediaries Conference Paper by Luc Laeven and Ross Levine
In this paper, Laeven and Levine evaluate the impact of ownership structure, franchise value, investor protection laws and bank regulations on the risk-taking behavior of banks around the world. Thus, they simultaneously examine an individual bank’s private governance structure and the policy environment in which it operates. In contrast, past work examines subsets of these factors. For example, Demirgüç-Kunt and Detragiache’s (2002) cross-country study of deposit insurance and banking crisises does not control for regulations designed to limit bank risk-taking or for bank-level governance traits. In turn, Saunders et al. (1990) and Demsetz et al. (1997) show how ownership structure, franchise value and other bank-level characteristics influence bank risk-taking in the US. They cannot, however, test whether numerous laws and regulations shape bank risk-taking, and it is unclear whether their results generalise to banks in other countries with different policies. By collecting new data on bank ownership and management and merging it with data on bank regulations and investor protection laws, the authors simultaneously examine the impact of a bank’s private governance arrangements and national policies, along with the potential interactions between the two, on bank risk-taking.
Latest News
-
22 November
BNY Mellon to buy Brazil’s ARX Capital Management
The Bank of New York Mellon is poised to acquire ARX Capital Management, a Brazilian hedge fund manager. ARX specialises in Brazilian multi-strategy, long/short and long-only investment strategies.
-
16 October
Corporate governance, regulation and bank risk-taking
Federal Reserve Bank of New York Corporate Finance of Financial Intermediaries Conference Paper by Luc Laeven and Ross Levine
-
16 October
Asset-backed securities: costs and benefits of bankruptcy remoteness
Federal Reserve Bank of New York Corporate Finance of Financial Intermediaries Conference Paper by Kenneth M Ayotte and Stav Gaon
-
16 October
Are acquisitions an operational hedge? The interaction of financial and operational hedging
Federal Reserve Bank of New York Corporate Finance of Financial Intermediaries Conference Paper by Kristine Watson Hankins
-
21 August
Performance measurement for hedge funds with neural network-derived benchmarks
Vienna University of Economics and Business Administration Working Paper Series Ramin Baghai-Wadji and Stefan Klocker
