We examine the effects of opacity on bank valuation and the synchronicity of bank equity prices over the years 2000-2006 prior to the 2007 financial crisis. Investments in opaque assets are more profitable than transparent assets, and controlling for profitability, have larger valuation...

We investigate whether factors beyond agency conflict are important in bank governance. Specifically, we examine the possibility that confusion and overlap between the roles of CEO and Chairman have important effects on bank risk and return. Using a new data set for UK banks over the period...

Using a large panel of US BHC over the 2001:Q1-2015:Q4, we investigate the risk-taking behaviors of banks within a comparison perspective – between public and private banks – where there exists substantial differences of asymmetry information and agency problems. We document evidence of...

We examine changes in risk following US bank mergers in the period 1981-2014. Short-run increases in acquirer risk following mergers occur only in the first few mergers undertaken by the same acquirer, and only in systematic risk. The equity volatility of acquirers does not increase. Using a new...

Our results show that US banks with a relatively high share of non-interest income become riskier with a moving toward non-interest-generating activities, especially activities from investment banking, proprietary trading, etc. The findings also prove, although weakly, that banks with a...

Does additional shareholder liability reduce bank failure? We compare the performance of around 4,400 state-regulated banks of similar size in neighboring U.S. states with different liability regimes during the Great Depression. We find that additional shareholder liability reduced bank failure...

We investigate the effects of informal institutions (trust, religiosity and the media) on the relationship between accounting-based risk measures and bank distress. We conduct our analysis in two stages. In the first stage, we extend the prior literature by documenting a link between...

The financial crisis of 2007-09 was interpreted by many as evidence that the incentives of managers were not optimally aligned with the interests of shareholders. As a result, a plethora of proposals have been put forward seeking to increase shareholder engagement. However, this shareholder...

Does state ownership breed risk-taking behavior in commercial banks? This paper examines this issue using a panel of Chinese banks. We find that state-ownership is in general associated with higher risks. In addition, we find that banks controlled by the central government have the highest...

Failures of banks' governance and risk management functions have been identified as key causes of the 2007-2008 financial crisis. This article reviews the empirical literature that investigates the relationship between governance structures and risk management functions as well as their impact...