Download or read book Does Corporate Culture Affect Bank Risk Taking Evidence from Loan Level Data written by Duc Duy Nguyen and published by . This book was released on 2018 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using comprehensive corporate and retail loan data, we show that the corporate culture of banks explains their risk-taking behaviour. Banks whose corporate culture leans towards aggressive competition are associated with riskier lending practices: higher approval rate, lower borrower quality, and fewer covenant requirements. Consequently, these banks incur larger loan losses and make greater contributions to systemic risk. The opposite behaviour is observed among banks whose culture emphasises control and safety. Our findings cannot be explained by heterogeneity in a bank's business model, CEO compensation incentives, and CEO characteristics. We use an exogenous shock to the US banking system during the 1998 Russian default crisis to support a causal inference.

Download or read book Bank Culture Risk Taking written by Laura Mervelskemper and published by . This book was released on 2019 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper is the first to empirically study the effects of different types of corporate culture on the risk-taking behavior of European banks. Based on a text analysis approach following the competing values framework, we analyze a hand-collected sample of 167 European banks from 2005 to 2015. We find that collaborate- and control-cultures have a risk-mitigating effect in terms of credit and default risk. Additionally, we find that collaborate- and control-banks have an even lower risk-taking in the recent financial crises, while compete-banks face erratically higher risks. Finally, we find that collaborate- and control-cultures affect the efficacy of govern-ance mechanisms.

Download or read book The Oxford Handbook of Banking written by Allen N. Berger and published by Oxford University Press. This book was released on 2019-10-31 with total page 1328 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Oxford Handbook of Banking, Third Edition provides an overview and analysis of developments and research in this rapidly evolving field. Aimed at graduate students of economics, banking, and finance; academics; practitioners; regulators; and policy makers, it strikes a balance between abstract theory, empirical analysis, and practitioner and policy-related material. Split into five distinct parts The Oxford Handbook of Banking is a one-stop source of relevant research in banking. It examines the theory of banking, bank operations and performance, regulatory and policy perspectives, macroeconomic perspectives in banking, and international differences in banking structures and environments. Taking a global perspective it examines banking systems in the United States, China, Japan, Australia and New Zealand, Africa, the European Union, transition countries of Europe, and Latin America. Thematic issues covered include financial innovation and technological change; consumer and mortgage lending; Islamic banking; and how banks influence real economic activity. Fully revised and now including brand new chapters on a range of geographical regions, bank bailouts and bail-ins, and behavioral economics amongst many other topics, this third edition of The Oxford Handbook of Banking provides readers with insights to seminal and contemporary research in banking and an opportunity to learn about the diversity of financial systems around the world.

Download or read book Risk Culture in Banking written by Alessandro Carretta and published by Springer. This book was released on 2017-10-11 with total page 453 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book explores risk culture in banks following the financial crisis. It analyses the role of national and institutional risk culture, market competitiveness, organisational systems and institutional practices that led to a weakening of risk culture in financial institutions leading up to the financial crisis. It addresses how to assess and measure risk culture, and analyse the impact on performance and reputation. Finally it explores the impact of regulation and a variety of tools that can be applied from the board down to promote a healthy risk culture in the governance of financial institutions internal controls and risk culture in banks.

Download or read book Competition Culture and Corporate Finance written by Terry Harris and published by Springer Nature. This book was released on 2023-04-24 with total page 260 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book introduces a measure of firms’ competition culture based on a textual analysis and natural language processing (NPL) of firms’ 10-K filings. Using this measure, the book explores the relationship between competition culture and various phenomena in corporate finance, specifically, institutional ownership structure, stock return performance, idiosyncratic stock price crash risk, meeting/beating analysts’ earnings expectations, and earnings management activity, for a large sample of US-based financial and non-financial firms. In particular, the book provides evidence that transient institutional ownership intensifies firms’ competition culture, while dedicated institutional ownership lessens it. In addition, the book’s findings suggest that firms with greater levels of competition culture achieve higher levels of short-term stock return performance, experience greater incidence of idiosyncratic stock price crashes, and are more prone to meet/beat analysts forecast and engage in accruals-based earnings manipulation. Finally, the book examines the role played by competition culture in financial firms (i.e., banks). Specifically, the book explores the effect of competition culture on bank lending and shows that banks with greater levels of competition culture are generally more prone to engage in procyclical lending activity. The findings of the book have significant policy implications and will be of interests to regulators, accounting standard-setters, managers and those charged with firm governance, career academics and researchers, graduates, and those generally interested in the role played by corporate culture in the related fields of finance, economics, and accounting.

Download or read book Effects of National Culture on Bank Risk Taking Behavior written by Badar Nadeem Ashraf and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Theory suggests that national culture influences bank risk-taking behavior directly by conditioning the decision-making of human participants. This study uses an international sample of banks from 75 countries and examines the direct effects of national culture on bank risk-taking behavior. We measure national culture with four dimensions - uncertainty avoidance, individualism vs. collectivism, masculinity vs. femininity and power distance - from Hofstede's framework of national culture. We find strong evidence that bank risk-taking is significantly higher in countries which have high individualism, low uncertainty avoidance, and low power distance cultural values. We confirm main results using alternate cultural dimensions from House et al. (2004. Culture, Leadership, and Organizations. Sage)'s framework of national culture, using alternative bank risk-taking proxies, and using instrumental variables analysis for endogeneity issues. This paper adds to our understanding by finding that cultural values lead to bank risk-taking decisions that may deviate in systematic and geographically predictable ways.

Download or read book The Risk taking Channel of Monetary Policy in the US written by Manthos D. Delis and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Technology and Measurement around the Globe written by Louis Tay and published by Cambridge University Press. This book was released on 2023-12-31 with total page 379 pages. Available in PDF, EPUB and Kindle. Book excerpt: Integrated exploration of the latest insights and advances on the intersection of technology and assessments around the world.

Download or read book The Federal Home Loan Bank System written by Deborah Cohen and published by . This book was released on 1980 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Powering the Digital Economy Opportunities and Risks of Artificial Intelligence in Finance written by El Bachir Boukherouaa and published by International Monetary Fund. This book was released on 2021-10-22 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses the impact of the rapid adoption of artificial intelligence (AI) and machine learning (ML) in the financial sector. It highlights the benefits these technologies bring in terms of financial deepening and efficiency, while raising concerns about its potential in widening the digital divide between advanced and developing economies. The paper advances the discussion on the impact of this technology by distilling and categorizing the unique risks that it could pose to the integrity and stability of the financial system, policy challenges, and potential regulatory approaches. The evolving nature of this technology and its application in finance means that the full extent of its strengths and weaknesses is yet to be fully understood. Given the risk of unexpected pitfalls, countries will need to strengthen prudential oversight.

Download or read book Does Risk Culture Pay Evidence from European Banks written by Nicola Bianchi and published by . This book was released on 2018 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: A poor risk culture was one cause of the financial crisis. Surprisingly, there is no evidence of the link between risk culture and bank stability. Using a large sample of European banks from 2004 to 2014, our paper shows that a sound risk culture leads to better performance. Our research design is based on three steps. First, we developed a new Sound Risk Culture Indicator based on the Financial Stability Board (2014) risk culture framework. Second, we estimated this new metric by applying quantitative text analysis. Third, we used an IV 2SLS panel data approach to establish a causal link between bank risk culture and profitability.

Download or read book Do Social Networks Encourage Risk Taking Evidence from Bank CEOs written by Yiwei Fang and published by . This book was released on 2016 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies how CEO social networks affect bank risk-taking. Using a sample of 481 publicly traded U.S. banks, we find that bank risk increases with CEOs' social networks. Our results are robust with a bank fixed-effects model and a difference-in-difference approach, as well as with various alternative bank risk measures. Alternative explanations such as corporate governance, managerial ownership, compensation, or CEO ability do not drive the findings. We evaluate potential channels through which social networks affect bank risk and find that CEO social networks increase bank risk more when banks face opaque information environments, when CEO job market conditions worsen, and when there are higher odds of group-think mentality in the networks. We further find that social networks present banks with an inefficient trade-off between risk and return, showing a “dark side” of social networks.

Download or read book Does Branch Religiosity Influence Bank Risk Taking written by Justin Chircop and published by . This book was released on 2016 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using branch-level data on public and private U.S. banking institutions we investigate the importance of branch religiosity in shaping bank risk-taking behavior. Our results show robust evidence that branch religiosity is negatively related to bank risk-taking. This effect persists after controlling for several bank-level and county-level variables that might correlate with religiosity. Moreover, this result is robust to controlling for headquarter religiosity, suggesting that the effect of branch religiosity is additive and not washed out by headquarter religiosity. Overall, our findings document that headquarter religiosity does not capture the full effect of religiosity on bank behavior, as claimed by previous research, but that the religiosity of the geographic area in which the bank operates significantly influences bank behavior.

Download or read book Which Banks are More Risky written by Matthias Köhler and published by . This book was released on 2012 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book National Culture and Bank Risk Taking written by Stella Mourouzidou Damtsa and published by . This book was released on 2017 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate the relation between national cultural values and bank risk. Despite the rigid transnational regulatory oversight of systemic European banks, we find evidence of an economically significant association between cultural values and domestic bank risk. Specifically, we report a positive (negative) association between the cultural values of individualism and hierarchy (trust) and domestic bank risk-taking. Consistent with our predictions, this relation weakened during the recent financial crisis and does not hold for global banks, regardless of the period under investigation. Our findings are robust to endogeneity tests that mitigate concerns regarding reverse causality and confounding effects affecting our conclusions.

Download or read book Identifying the Risk Taking Channel of Monetary Transmission and the Connection to Economic Activity written by Nimrod Segev and published by . This book was released on 2018 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: I use loan-level data from the syndicated loan market in the U.S. to investigate how monetary policy affects banks' sensitivity to risk. Using loan-level data and banks' sensitivity to risk enables me to identify the risk-taking channel and disentangle it from other monetary channels. I show that banks change their behavior toward risk following changes in monetary policy where loose monetary policy reduces banks' sensitivity to risk. I then provide evidence for the significant contribution of risk-taking shocks and changes in banks' risk-taking behavior to economic outcomes and business cycle fluctuations. The paper's primary contribution is in providing new loan-level evidence for the existence of the risk-taking channel in the U.S., as well as a first possible link between the risk-taking channel and business cycle fluctuations.

Download or read book Loan Portfolio Management written by and published by . This book was released on 1988 with total page 114 pages. Available in PDF, EPUB and Kindle. Book excerpt: