scholarly journals Bank Governance, Regulation and Risk Taking: Evidence from Tunisia

2016 ◽  
Vol 3 (2) ◽  
pp. 122
Author(s):  
Mondher Kouki ◽  
Lamia Mabrouk
Keyword(s):  
Agency Theory ◽  
Ownership Structure ◽  
Risk Taking ◽  
Bank Risk ◽  
Board Independence ◽  
Board Size ◽  
Expected Effect ◽  
Prior Literature ◽  
Bank Governance

This paper investigates the hypothesis that governance and regulation have a role in reducing bank risk. Our evidences are partially consistent with standard agency theory. Using a sample of Tunisian listed banks between 2000 and 2014, we show that bank risk is, influenced positively by ownership structure and negatively by regulation, which confirm our hypotheses. However, board independence and board size seems to have the opposite expected effect, which is largely inconsistent with findings in the prior literature.

scholarly journals When do regulations matter for bank risk-taking? An analysis of the interaction between external regulation and board characteristics

2018 ◽  
Vol 18 (3) ◽  
pp. 440-461 ◽  
Author(s):  
Glauco De Vita ◽  
Yun Luo
Keyword(s):  
Risk Taking ◽  
Gender Diversity ◽  
Capital Requirements ◽  
Market Discipline ◽  
Bank Risk ◽  
Board Independence ◽  
Board Governance ◽  
Board Size ◽  
Content Type ◽  
External Regulation

PurposeAccording to previous international studies, the impact of external regulation on bank risk is ambiguous. The purpose of this paper is to ask the question, “When do regulations matter for bank risk-taking?” by reporting the first empirical investigation of how the relation between bank regulations (capital requirements, official supervisory power and market discipline) and bank risk-taking is moderated by board monitoring characteristics.Design/methodology/approachUsing SYS-GMM, the analysis of the interaction between bank-level boards of directors’ attributes (board size, board independence and board gender diversity) and external regulation is based on a sample of 493 banks operating in 54 countries over 2001-2015, accounting for three measures of bank risk-taking.FindingsRegulations matter for bank risk-taking conditional on board characteristics: board size, board independence and board diversity. With the exception of capital requirements, the market discipline exerted by external private monitoring and greater supervisory power are unable to mitigate the propensity to greater risk-taking by banks resulting from larger board size, higher board independence and greater gender diversity of the board.Originality/valueThe bank risk empirical literature is still silent as to the interaction between board governance and regulation for the purpose of examining banks’ risk-taking. This paper fills this gap, thus making a significant contribution by extending our knowledge of whether and how board governance moderates the relationship between external regulation and bank risk-taking.

scholarly journals The Impact of Private Ownership Structure on Risk Taking by Pakistani Banks: An Empirical Study

2018 ◽  
Vol 6 (3) ◽  
Author(s):  
Muhammad Sajjad Hussain ◽  
Muhammad Muhaizam Bin Musa Musa ◽  
Muhammad Muhaizam Bin Musa Musa ◽  
Abdelnaser Omran Ali
Keyword(s):  
Ownership Structure ◽  
Risk Taking ◽  
Negative Impact ◽  
Negative Relationship ◽  
Financial Statements ◽  
International Standards ◽  
Bank Risk ◽  
Private Ownership ◽  
Private Banks ◽  
The Impact

The financial crisis of 2007-09 was converted the focus of researchers and regulators toward bank risk-taking and this study is also analyzed the private ownership structure impact on Pakistani bank’s risk-taking. This study selects the all Pakistani private banks for investigation and data is collected from financial statements from 2005 to 2016. Most of the past studies found a negative impact of private ownership structure on bank risk-taking and this study is also indicated the negative relationship between private ownership and bank risk-taking. On the other, non-performing loans are double than the international standards that highlighted the owner’s attention toward high risky investments for high return. Thus, this study suggests that check this relationship with other factors that forced the owner’s behavior toward risk.

scholarly journals The board of directors and firm performance: empirical evidence from listed companies

2019 ◽  
Vol 19 (3) ◽  
pp. 508-551 ◽  
Author(s):  
Alessandro Merendino ◽  
Rob Melville
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Agency Theory ◽  
Ownership Structure ◽  
Listed Companies ◽  
Independent Directors ◽  
Board Structure ◽  
Board Size ◽  
Ceo Duality ◽  
Content Type

PurposeThis study aims to reconcile some of the conflicting results in prior studies of the board structure–firm performance relationship and to evaluate the effectiveness and applicability of agency theory in the specific context of Italian corporate governance practice.Design/methodology/approachThis research applies a dynamic generalised method of moments on a sample of Italian listed companies over the period 2003-2015. Proxies for corporate governance mechanisms are the board size, the level of board independence, ownership structure, shareholder agreements and CEO–chairman leadership.FindingsWhile directors elected by minority shareholders are not able to impact performance, independent directors do have a non-linear effect on performance. Board size has a positive effect on firm performance for lower levels of board size. Ownership structure per se and shareholder agreements do not affect firm performance.Research limitations/implicationsThis paper contributes to the literature on agency theory by reconciling some of the conflicting results inherent in the board structure–performance relationship. Firm performance is not necessarily improved by having a high number of independent directors on the board. Ownership structure and composition do not affect firm performance; therefore, greater monitoring provided by concentrated ownership does not necessarily lead to stronger firm performance.Practical implicationsThis paper suggests that Italian corporate governance law should improve the rules and effectiveness of minority directors by analysing whether they are able to impede the main shareholders to expropriate private benefits on the expenses of the minority. The legislator should not impose any restrictive regulations with regard to CEO duality, as the influence of CEO duality on performance may vary with respect to the unique characteristics of each company.Originality/valueThe results enrich the understanding of the applicability of agency theory in listed companies, especially in Italy. Additionally, this paper provides a comprehensive synthesis of research evidence of agency theory studies.

scholarly journals Impact of Ownership Structure on Bank Risk Taking: A Comparative Analysis of Conventional Banks and Islamic Banks of Pakistan

2021 ◽  
Vol 4 (1) ◽  
pp. 175-181
Author(s):  
ARIF HUSSAIN ◽  
DR. ALAM REHMAN ◽  
AQSA SIDDIQUE ◽  
HASEEB UR REHMAN
Keyword(s):  
Ownership Structure ◽  
Risk Taking ◽  
Positive Impact ◽  
Institutional Ownership ◽  
Foreign Ownership ◽  
Bank Risk ◽  
Managerial Ownership ◽  
Islamic Banks ◽  
Block Holders ◽  
Conventional Banks

This study is about the impact of ownership structure on bank risk taking with comparison between conventional banks and Islamic banks of Pakistan. Z-Score and SDROA are used as risk taking variables. While managerial ownership, institutional ownership, foreign ownership and block holders were taken as proxies for ownership structure. Ten private commercial banks and four Islamic banks were randomly selected and data have been collected from annual reports of these banks from 2010 to 2016. The result suggested that all the proxies of ownership structure i.e. managerial ownership, institutional ownership, foreign ownership and block holders have significant positive impact on Z-Score. On the other hand using SDROA as proxy for risk taking the proxies of managerial ownership has significant positive impact on SDROA and institutional ownership has significant negative impact on SDROA of banks in Pakistan. On the other hand foreign ownership and block holders have insignificant impact on SDROA. The result of BankID is significant which shows that ownership structure has significant impact on bank risk taking in conventional banks while in Islamic banks ownership structure doesn’t have any significant impact on bank risk.

scholarly journals Impact of corporate governance on financial disclosures: Evidence from India

2014 ◽  
Vol 12 (1) ◽  
pp. 874-889 ◽  
Author(s):  
Mehul Raithatha ◽  
Varadraj Bapat
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Board Independence ◽  
Board Structure ◽  
Board Size ◽  
Cross Sectional ◽  
Listed Firms ◽  
Disclosure Requirements ◽  
Financial Disclosures

The paper aims at identifying impact of corporate governance variables i.e. board structure (board size, board independence, board activity and board busyness) and ownership structure (foreign promoters holding, institutional shareholding and CEO duality) on financial disclosures made by the Indian firms. Using cross sectional data of 325 listed firms for the financial year 2009-10, we compute financial disclosure score (using 171 checklist points) based on disclosure requirements of accounting standards. We find average disclosure score of 73%, maximum and minimum being 100% and 46% respectively. Our finding support agency theory in terms of monitoring role of board since board size is found to be significant however we do not find any influence of board independence on the disclosures. The study also supports resource dependency theory in terms of outside directorship which might provide exposure to different corporate environment, brings diverse perspectives and knowledge to the directors and this in turn leads to improved disclosures. We also support the notion that having foreign promoter shareholding improves disclosures

Capital regulation and ownership structure on bank risk

2019 ◽  
Vol 28 (1) ◽  
pp. 39-56 ◽  
Author(s):  
Aysa Siddika ◽  
Razali Haron
Keyword(s):  
Maximum Likelihood ◽  
Ownership Structure ◽  
Risk Taking ◽  
Commercial Banks ◽  
Dynamic Panel Data ◽  
Bank Risk ◽  
Capital Regulation ◽  
Content Type ◽  
Global Banking ◽  
The Impact

Purpose This paper aims to examine the impact of capital regulation, ownership structure and the degree of ownership concentration on the risk of commercial banks. Design/methodology/approach This study uses a sample of 565 commercial banks from 52 countries over the period of 2011-2015. A dynamic panel data model estimation using the maximum likelihood with structural equation modelling (SEM) was followed considering the panel nature of this study. Findings The study found that the increase of capital ratio decreases bank risk and the regulatory pressure increases the risk-taking of the bank. No statistically significant relationship between banks’ ownership structure and risk-taking was found. The concentration of ownership was found negatively associated with bank risk. Finally, the study found that in the long term, bank increases the capital level that decreases the default risk. Originality/value This study presents an empirical analysis on the global banking system focusing on the Basel Committee member and non-member countries that reflect the implementation of Basel II and Basel III. Therefore, it helps fill the gap in the banking literature on the effect of recent changes in the capital regulation on bank risk. Maximum likelihood with SEM addresses the issue of endogeneity, efficiency and time-invariant variables. Moreover, this study measures the risk by different proxy variables that address total, default and liquidity risks of the banks. Examining from a different perspective of risk makes the study more robust.

Ownership Structure, Capital Regulation and Bank Risk Taking

2012 ◽  
Vol 3 (3) ◽  
pp. 176-188 ◽  
Author(s):  
Nora Azureen Abdul Rahman ◽  
Nor Hayati Ahmad ◽  
Nur Adiana Hiau Abdullah
Keyword(s):  
Ownership Structure ◽  
Risk Taking ◽  
Bank Risk ◽  
Capital Regulation
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