Risk-Taking Behavior and Management Ownership in Depository Institutions

We examine the relation between risk and ownership structure among depository institutions. The empirical results provide evidence that the relation between ownership by managers and various measures of depository institution risk is negative and significant suggesting that as managerial ownership increases, the level of risk-taking decreases. This finding, which supports a risk aversion hypothesis, is consistent across several risk measures. Furthermore, we document greater risk and greater risk aversion for savings institutions relative to commercial banks