Corporate Control in Commercial Banks
Unique factors in commercial banks' legal and regulatory environment may influence their mechanisms of corporate control. I investigate this issue in a sample of U.S. bank holding companies (BHCs) by analyzing how many underwent a change in corporate control by hostile takeover, friendly merger, management turnover by the board, or intervention by regulators I compare the relative importance of these methods with those in nonfinancial firms. I relate the use of these methods to BHC board and ownership structure and performance. I find that the most important corporate control mechanism in banks is regulatory intervention, and that the primary market-based corporate control mechanism is action by the board of directors. Overall, however, BHC boards are much less assertive than their counterparts at nonfinancial firms. I examine reasons for this.
Year of publication: |
1997
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Authors: | Prowse, Stephen |
Published in: |
Journal of Financial Research. - Southern Finance Association - SFA, ISSN 0270-2592. - Vol. 20.1997, 4, p. 509-27
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Publisher: |
Southern Finance Association - SFA Southwestern Finance Association - SWFA |
Saved in:
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