Publication:
Corporate Governance and Bank Insolvency Risk : International Evidence

dc.contributor.author Anginer, Deniz
dc.contributor.author Demirguc-Kunt, Asli
dc.contributor.author Huizinga, Harry
dc.contributor.author Ma, Kebin
dc.date.accessioned 2014-10-02T20:31:42Z
dc.date.available 2014-10-02T20:31:42Z
dc.date.issued 2014-09
dc.description.abstract This paper finds that shareholder-friendly corporate governance is positively associated with bank insolvency risk, as proxied by the Z-score and the Merton's distance to default measure, for an international sample of banks over the 2004-08 period. Banks are special in that "good" corporate governance increases bank insolvency risk relatively more for banks that are large and located in countries with sound public finances, as banks aim to exploit the financial safety net. Good corporate governance is specifically associated with higher asset volatility, more nonperforming loans, and a lower tangible capital ratio. Furthermore, good corporate governance is associated with more bank risk-taking at times of rapid economic expansion. Consistent with increased risk-taking, good corporate governance is associated with a higher valuation of the implicit insurance provided by the financial safety net, especially in the case of large banks. These results underline the importance of the financial safety net and too-big-to-fail policies in encouraging excessive risk-taking by banks. en
dc.identifier http://documents.worldbank.org/curated/en/2014/09/20163225/corporate-governance-bank-insolvency-risk-international-evidence
dc.identifier.uri http://hdl.handle.net/10986/20343
dc.language English
dc.language.iso en_US
dc.publisher World Bank Group, Washington, DC
dc.relation.ispartofseries Policy Research Working Paper;No. 7017
dc.rights CC BY 3.0 IGO
dc.rights.uri http://creativecommons.org/licenses/by/3.0/igo/
dc.subject ACCOUNTING
dc.subject ADVERSE EFFECTS
dc.subject ASSET GROWTH
dc.subject ASSET VALUE
dc.subject ASSET VALUES
dc.subject ASSETS RATIO
dc.subject AUDIT COMMITTEE
dc.subject AUDITING
dc.subject AUDITORS
dc.subject BALANCE SHEET
dc.subject BANK ACTIVITIES
dc.subject BANK ASSET
dc.subject BANK ASSETS
dc.subject BANK BAILOUTS
dc.subject BANK CAPITAL
dc.subject BANK CAPITALIZATION
dc.subject BANK FAILURE
dc.subject BANK FAILURES
dc.subject BANK HOLDING
dc.subject BANK HOLDING COMPANIES
dc.subject BANK INSOLVENCY
dc.subject BANK LENDING
dc.subject BANK LIABILITIES
dc.subject BANK LOAN
dc.subject BANK LOANS
dc.subject BANK REGULATION
dc.subject BANK RISK
dc.subject BANK SIZE
dc.subject BANKING INDUSTRY
dc.subject BANKING SECTOR
dc.subject BANKRUPTCY
dc.subject BANKS
dc.subject BOOK VALUE
dc.subject BUDGET BALANCE
dc.subject BUSINESS CYCLE
dc.subject CALL OPTION
dc.subject CAPITAL ADEQUACY
dc.subject CAPITAL ASSETS
dc.subject CAPITAL RATIO
dc.subject CAPITAL RATIOS
dc.subject CAPITAL REQUIREMENTS
dc.subject CAPITALIZATION
dc.subject CASH FLOW
dc.subject CDS
dc.subject COLLATERAL
dc.subject COMMERCIAL BANK
dc.subject COMMERCIAL BANKS
dc.subject CONSUMER PRICE INFLATION
dc.subject CONTINGENT CLAIM
dc.subject CORPORATE BANKRUPTCY
dc.subject CORPORATE DEBT
dc.subject CORPORATE FINANCE
dc.subject CORPORATE GOVERNANCE
dc.subject CORPORATE GOVERNANCE REFORMS
dc.subject CORPORATE GOVERNANCE REGIMES
dc.subject COUNTRY COVERAGE
dc.subject COUNTRY DATA
dc.subject COUNTRY FIXED EFFECTS
dc.subject CREDIBILITY
dc.subject CREDIT EXPANSION
dc.subject CREDIT RISK
dc.subject CREDITORS
dc.subject CREDITWORTHINESS
dc.subject DEBT
dc.subject DEFAULT PROBABILITIES
dc.subject DEFAULT RISK
dc.subject DEFICITS
dc.subject DEGREE OF RISK
dc.subject DEPENDENT
dc.subject DEPOSIT
dc.subject DEPOSIT FUNDING
dc.subject DEPOSIT INSURANCE
dc.subject DEPOSITS
dc.subject DEREGULATION
dc.subject DISTRESSED BANKS
dc.subject DIVIDEND
dc.subject DIVIDEND RATE
dc.subject DIVIDENDS
dc.subject DUMMY VARIABLE
dc.subject DUMMY VARIABLES
dc.subject ECONOMIC GROWTH
dc.subject EQUITY HOLDER
dc.subject EQUITY PRICES
dc.subject EQUITY RATIO
dc.subject EQUITY RETURNS
dc.subject EQUITY VALUE
dc.subject FACE VALUE
dc.subject FAIR VALUE
dc.subject FEDERAL RESERVE
dc.subject FEDERAL RESERVE BANK
dc.subject FEDERAL RESERVE BANK OF NEW YORK
dc.subject FEE INCOME
dc.subject FINANCIAL CRISIS
dc.subject FINANCIAL INSTABILITY
dc.subject FINANCIAL INSTITUTIONS
dc.subject FINANCIAL INTERMEDIATION
dc.subject FINANCIAL MARKET
dc.subject FINANCIAL SAFETY NET
dc.subject FINANCIAL SAFETY NETS
dc.subject FINANCIAL SERVICES
dc.subject FINANCIAL STUDIES
dc.subject FINANCIAL SUPPORT
dc.subject FINANCIAL SYSTEM
dc.subject FISCAL BALANCE
dc.subject FIXED ASSETS
dc.subject FOREIGN FIRMS
dc.subject GOVERNANCE INDEX
dc.subject GOVERNANCE INDICES
dc.subject GOVERNANCE PRACTICES
dc.subject GOVERNANCE VARIABLES
dc.subject GOVERNMENT BUDGET
dc.subject GOVERNMENT SECURITIES
dc.subject GROWTH RATE
dc.subject HOLDINGS
dc.subject HOLDINGS OF GOVERNMENT SECURITIES
dc.subject INDIVIDUAL BANKS
dc.subject INFLATION
dc.subject INFLATION RATE
dc.subject INSOLVENCY RISK
dc.subject INSOLVENT
dc.subject INSTRUMENT
dc.subject INSURANCE
dc.subject INSURANCE PREMIUM
dc.subject INTANGIBLE
dc.subject INTEREST INCOME
dc.subject INTEREST RATES
dc.subject INTERNATIONAL BANK
dc.subject INTERPOLATION
dc.subject INVESTING
dc.subject INVESTOR PROTECTION
dc.subject LARGE BANKS
dc.subject LIABILITY
dc.subject LIABILITY SIDE
dc.subject LOAN LOSS
dc.subject LOAN LOSS PROVISIONING
dc.subject LOAN PERFORMANCE
dc.subject LOAN QUALITY
dc.subject MARKET DATA
dc.subject MARKET DISCIPLINE
dc.subject MARKET EQUITY
dc.subject MARKET VALUE
dc.subject MARKET VALUE OF EQUITY
dc.subject MERGERS
dc.subject MINORITY SHAREHOLDERS
dc.subject MORAL HAZARD
dc.subject MORTGAGE
dc.subject MORTGAGE-BACKED SECURITIES
dc.subject NATIONAL BANKS
dc.subject NATIONAL ECONOMY
dc.subject NON-PERFORMING LOANS
dc.subject NONPERFORMING LOANS
dc.subject NPL
dc.subject OPERATING INCOME
dc.subject OVERSIGHT OF BANK
dc.subject PERFORMANCE RISK
dc.subject POLICY IMPLICATIONS
dc.subject PROBABILITY OF BANKRUPTCY
dc.subject PUBLIC COMPANIES
dc.subject PUBLIC DEFICITS
dc.subject PUBLIC FINANCES
dc.subject PUBLIC POLICY
dc.subject PUT OPTION
dc.subject RAPID ECONOMIC EXPANSION
dc.subject RATE OF RETURN
dc.subject REAL ESTATE
dc.subject REGULATORS
dc.subject REGULATORY OVERSIGHT
dc.subject REGULATORY RESTRICTIONS
dc.subject REPUTATION
dc.subject RESTRICTIONS ON BANK ACTIVITIES
dc.subject RETURN ON ASSETS
dc.subject RETURN ON EQUITY
dc.subject RISK CONTROLS
dc.subject RISK MANAGEMENT
dc.subject RISK TAKING
dc.subject RISK WEIGHT
dc.subject RISK WEIGHTED ASSETS
dc.subject RISK WEIGHTS
dc.subject RISK-FREE RATE
dc.subject RISKY ASSETS
dc.subject SECURITIES MARKETS
dc.subject SHARE PRICE
dc.subject SHAREHOLDER
dc.subject SHAREHOLDERS
dc.subject SHORT-TERM BORROWING
dc.subject STOCK OPTION
dc.subject STOCK OPTIONS
dc.subject STOCK PRICE
dc.subject STOCK RETURNS
dc.subject SUPERVISORY AGENCY
dc.subject SUPERVISORY AUTHORITIES
dc.subject TANGIBLE ASSETS
dc.subject TAX
dc.subject TRADING
dc.subject TRADING INCOME
dc.subject TRANSACTION
dc.subject TREASURY
dc.subject TREASURY BILL
dc.subject TREASURY BILL RATE
dc.subject VALUATION
dc.subject VALUE OF ASSETS
dc.subject VALUE OF DEBT
dc.subject VOLATILITY
dc.subject WORLD DEVELOPMENT INDICATORS
dc.title Corporate Governance and Bank Insolvency Risk : International Evidence en
dspace.entity.type Publication
okr.date.disclosure 2014-09-01
okr.doctype Publications & Research :: Policy Research Working Paper
okr.doctype Publications & Research
okr.docurl http://documents.worldbank.org/curated/en/2014/09/20163225/corporate-governance-bank-insolvency-risk-international-evidence
okr.globalpractice Finance and Markets
okr.globalpractice Governance
okr.globalpractice Trade and Competitiveness
okr.identifier.doi 10.1596/1813-9450-7017
okr.identifier.externaldocumentum 000158349_20140902113102
okr.identifier.internaldocumentum 20163225
okr.identifier.report WPS7017
okr.language.supported en
okr.pdfurl http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/09/02/000158349_20140902113102/Rendered/PDF/WPS7017.pdf en
okr.topic Banks and Banking Reform
okr.topic Governance :: Governance Indicators
okr.topic Private Sector Development :: Emerging Markets
okr.topic Finance and Financial Sector Development :: Debt Markets
okr.topic Finance and Financial Sector Development :: Bankruptcy and Resolution of Financial Distress
okr.unit Development Research Group
okr.volume 1 of 1
relation.isAuthorOfPublication 234a20c0-893c-561a-8c90-6f5be5be5b9b
relation.isSeriesOfPublication 26e071dc-b0bf-409c-b982-df2970295c87
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