Excess Liquidity and Bank Managers’ Remuneration: The Role of Monetary Policy

Abstract

This paper investigates the impacts of monetary policy on bank managers' remuneration in Vietnam and China where excess liquidity is present in the economies. The study argues that excess liquidity provides the condition to conceal risk taken by bank managers, and hence their remunerations are improved. However, the capability of excess liquidity in concealing risk is attenuated during the tightening monetary policy regime. The study extends the relationship between monetary policy and risk taking incentives of bank managers to the context of excess liquidity condition.

Political connections and remuneration of bank boards’ members: moderating effect of gender diversity

“…Thus, in order to improve their management practices, banks must control costs efficiently (Nasserinia et al 2014), including remuneration spending (Garcia and Guerreiro 2016). Finally, in line with McFarlane and Das (2019); Nguyen, Boateng, et al (2018); Nguyen, Le, et al (2018), GDP per capita positively influences the remuneration of bank boards, since a higher economic level allows for higher remuneration levels.…”