Purpose This study investigates the risk-taking behavior of financial institutions in the USA. Specifically, differences between taking risks that affect primarily the shareholders of the institution and risks contributing to the overall systemic risk of the financial sector are examined....

Governance characteristics are potentially a proxy for information asymmetry that may be better captured by the market liquidity of a company's shares. Although liquidity has been established as a risk factor in the asset-pricing paradigm, there is still an ongoing debate as to whether...

This paper examines the impact of volatility on information asymmetry in explaining excess returns. We find that illiquidity is significant at different levels of volatility but that adverse selection costs are not significant during periods of extreme volatilities, i.e., very high and very low...