Corporate Governance and Bank Insolvency Risk : International Evidence

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
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.date.lastModified
2021-04-23T14:03:55Z
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
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BANK LOANS
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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
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.googlescholar.linkpresent
yes
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

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