TY - JOUR
T1 - Does board composition and ownership structure affect banks’ systemic risk? European evidence
AU - Díez-Esteban, José María
AU - Farinha, Jorge Bento
AU - García-Gómez, Conrado Diego
AU - Mateus, Cesario
N1 - Publisher Copyright:
© 2021, The Author(s), under exclusive licence to Springer Nature Limited.
PY - 2022
Y1 - 2022
N2 - In this paper, we expand the scarce literature regarding the effects of ownership structure and board composition on market measures of banks’ systemic risk. Based on a sample of 87 European banks over the period 2010–2016, we provide evidence that ownership concentration has a non-monotonic (inverted u-shape) relationship with systemic risk. Additionally, we find that board characteristics (board size and gender) affect a bank’s systemic risk, but for small banks only. Overall, our evidence suggests that the traditional banks’ size-focused approach to systemic risk study should be complemented with governance dimensions, especially in a context like the European one, where ownership concentration is high. Our results also imply that practitioners and policymakers should promote better governance practices in banks in the form of more adequate ownership and board structures that are better able to control systemic risk.
AB - In this paper, we expand the scarce literature regarding the effects of ownership structure and board composition on market measures of banks’ systemic risk. Based on a sample of 87 European banks over the period 2010–2016, we provide evidence that ownership concentration has a non-monotonic (inverted u-shape) relationship with systemic risk. Additionally, we find that board characteristics (board size and gender) affect a bank’s systemic risk, but for small banks only. Overall, our evidence suggests that the traditional banks’ size-focused approach to systemic risk study should be complemented with governance dimensions, especially in a context like the European one, where ownership concentration is high. Our results also imply that practitioners and policymakers should promote better governance practices in banks in the form of more adequate ownership and board structures that are better able to control systemic risk.
KW - Banks
KW - Board composition
KW - Ownership structure
KW - Systemic risk
UR - http://www.scopus.com/inward/record.url?scp=85103384332&partnerID=8YFLogxK
U2 - 10.1057/s41261-021-00148-2
DO - 10.1057/s41261-021-00148-2
M3 - Journal article
AN - SCOPUS:85103384332
SN - 1745-6452
VL - 23
SP - 155
EP - 172
JO - Journal of Banking Regulation
JF - Journal of Banking Regulation
IS - 2
ER -