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Ownership structure, market discipline, and banks' risk-taking incentives under deposit insurance
Författare
Summary, in English
The paper studies the effects of market discipline by creditors and ownership structure on banks' risk taking in the presence of partial deposit insurance. An agency-cost model explains how the effects of creditor discipline and shareholder control arc interdependent, the non-monotonic effect of shareholder control, and the role of leverage. Panel regressions on several hundred banks worldwide 1995-2005 confirm a negative individual risk effect of creditor discipline and the expected convex effect of shareholder control. Increased shareholder control significantly strengthens the negative effect of market discipline on asset risk, but joint effects on overall default risk are limited. (C) 2011 Elsevier B.V. All rights reserved.
Avdelning/ar
- Institutet för Ekonomisk forskning
Publiceringsår
2011
Språk
Engelska
Sidor
2666-2678
Publikation/Tidskrift/Serie
Journal of Banking & Finance
Volym
35
Issue
10
Länkar
Dokumenttyp
Artikel i tidskrift
Förlag
Elsevier
Ämne
- Economics and Business
Nyckelord
- Bank risk
- Market discipline
- Ownership structure
- Deposit insurance
Aktiv
Published
ISBN/ISSN/Övrigt
- ISSN: 1872-6372