Working capital does not receive a great deal of attention in financial decision making. Perhaps this is because it involves investment and financing for the short term. Nevertheless, it is an important component of firm financial management. This study investigates the relationship between...

Ever since the financial crisis of the banking system of 2008 - 2010 the paradigm that deposits or other exposures towards major banks are safe has been fundamentally questioned. This put industrial corporates, who to support their business usually need to manage significant cash holdings or...

Cash holdings have often been presumed to help resolve the inherent uncertainty of assessing banks. Nonetheless, extant empirical evidence is inconclusive. The present paper adopts a novel approach to assessing the level of stockholder uncertainty associated with the cash holdings reported by...

Developing banking standards is an important process for a country’s financial and economic well being. Their importance incites governments to insure the stability and the good performance of their banking systems. Accordingly, several researchers pay a particular attention to banking...

This Paper considers why a manager would choose to submit himself to the discipline of bank monitoring. This issue is analysed within the context of a model where the manager enjoys private benefits, which can be restricted by the monitor, and is optimally compensated by shareholders. Within...

In this study I combine the ownership and diversification literature and show that the agency problem varies across traditional, diversified and non-traditional banks. In a sample of European banks, I find that management ownership has a positive impact on profitability in non-traditional banks,...

A focal point in strategic and regulatory debates about the pros and cons of diversification among financial institutions continues to be the issue of economies of scope in financial intermediation. In this paper, we summarize the theoretical research on the value of diversification in financial...

This paper analyzes the systemic risk effects of bank mergers to test the “concentration-fragility” hypothesis. We use the marginal expected shortfall as well as the lower tail dependence between a bank’s stock returns and a relevant bank sector index to capture the merger-related change...

This paper analyses the optimal conglomeration of bank activities. We show that the effectiveness of market discipline for stand-alone activities (divisions) is of crucial importance for the potential benefits of conglomeration. We find that effective market discipline reduces the potential...

Unlike industrial companies, banks allocate “risk-taking potential” across subunits, instead of investment budgets or assets. Researchers typically do not have access to this data on risk-bearing capacity across subunits and use (changes in) assets or loans instead. Based on unique data from...