Systemic Risk, Corporate Governance and Regulation of Banks Across Emerging Countries

A New Approach to Sustainable Financial Stability and its Prospects

“…This reflects the loss of the company's capitalization during the implementation of a stress scenario in the market as a whole (see Acharya et al, 2017). A similar conclusion was reached by Andries and Nistor (2016), who studied the influence of the quality of corporate governance of 27 CEE banks on CoVaR dynamics between 2005 and 2014. The similar results can be explained by the fact that high corporate governance standards, which imply that the maximum focus of the bank managers was on meeting the interests of shareholders, force them to take an excessive level of risk in the expectation of obtaining higher profits, encouraging them to pay big dividends.…”

A New Approach to Sustainable Financial Stability and its Prospects

“…This reflects the loss of the company's capitalization during the implementation of a stress scenario in the market as a whole (see Acharya et al, 2017). A similar conclusion was reached by Andries and Nistor (2016), who studied the influence of the quality of corporate governance of 27 CEE banks on CoVaR dynamics between 2005 and 2014. The similar results can be explained by the fact that high corporate governance standards, which imply that the maximum focus of the bank managers was on meeting the interests of shareholders, force them to take an excessive level of risk in the expectation of obtaining higher profits, encouraging them to pay big dividends.…”

Macroprudential policies, corporate governance and bank risk: Cross-country evidence

“…Using a cross-country sample from 48 countries, Laeven and Levine (2009) show that the relationship between bank risk and capital regulations, deposit insurance policies, and restrictions on bank activities can be either positive or negative depending on the comparative power of shareholders within the corporate governance structure of each bank. Andries and Nistor (2016) provide similar evidence from ten Central Eastern European (CEE) countries, concluding that the impact of corporate governance policies on systemic risk is affected by the tightness of three types of regulations, namely supervisory power, capital requirements and activity restrictions. Finally, using data from 54 countries, De Vita and Luo (2018) conclude that with the exception of capital requirements, other tools that relate to the pillars of Basel II, namely market discipline and 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.…”

Bank systemic risk: An analysis of the sovereign rating ceiling policy and rating downgrades

“…In this section, we expand our baseline analysis by including some corporate governance controls as these can affect bank systemic risk (Andrieş & Nistor, 2016). In particular, following Díez‐Esteban et al.…”

“…In this section, we expand our baseline analysis by including some corporate governance controls as these can affect bank systemic risk (Andrieş & Nistor, 2016). In particular, following Díez-Esteban et al (2021) we include the annual percentage of female board members (Female directors) and independent board members (Independent board directors) and the total number of board members (Board size) for each bank.…”

A New Approach to Sustainable Financial Stability and its Prospects

“…This reflects the loss of the company's capitalization during the implementation of a stress scenario in the market as a whole (see Acharya et al, 2017). A similar conclusion was reached by Andries and Nistor (2016), who studied the influence of the quality of corporate governance of 27 CEE banks on CoVaR dynamics between 2005 and 2014. The similar results can be explained by the fact that high corporate governance standards, which imply that the maximum focus of the bank managers was on meeting the interests of shareholders, force them to take an excessive level of risk in the expectation of obtaining higher profits, encouraging them to pay big dividends.…”

Macroprudential policies, corporate governance and bank risk: Cross-country evidence

“…Using a cross-country sample from 48 countries, Laeven and Levine (2009) show that the relationship between bank risk and capital regulations, deposit insurance policies, and restrictions on bank activities can be either positive or negative depending on the comparative power of shareholders within the corporate governance structure of each bank. Andries and Nistor (2016) provide similar evidence from ten Central Eastern European (CEE) countries, concluding that the impact of corporate governance policies on systemic risk is affected by the tightness of three types of regulations, namely supervisory power, capital requirements and activity restrictions. Finally, using data from 54 countries, De Vita and Luo (2018) conclude that with the exception of capital requirements, other tools that relate to the pillars of Basel II, namely market discipline and 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.…”

Bank systemic risk: An analysis of the sovereign rating ceiling policy and rating downgrades

“…In this section, we expand our baseline analysis by including some corporate governance controls as these can affect bank systemic risk (Andrieş & Nistor, 2016). In particular, following Díez‐Esteban et al.…”

“…In this section, we expand our baseline analysis by including some corporate governance controls as these can affect bank systemic risk (Andrieş & Nistor, 2016). In particular, following Díez-Esteban et al (2021) we include the annual percentage of female board members (Female directors) and independent board members (Independent board directors) and the total number of board members (Board size) for each bank.…”

A New Approach to Sustainable Financial Stability and its Prospects

“…This reflects the loss of the company's capitalization during the implementation of a stress scenario in the market as a whole (see Acharya et al, 2017). A similar conclusion was reached by Andries and Nistor (2016), who studied the influence of the quality of corporate governance of 27 CEE banks on CoVaR dynamics between 2005 and 2014. The similar results can be explained by the fact that high corporate governance standards, which imply that the maximum focus of the bank managers was on meeting the interests of shareholders, force them to take an excessive level of risk in the expectation of obtaining higher profits, encouraging them to pay big dividends.…”

Macroprudential policies, corporate governance and bank risk: Cross-country evidence

“…Using a cross-country sample from 48 countries, Laeven and Levine (2009) show that the relationship between bank risk and capital regulations, deposit insurance policies, and restrictions on bank activities can be either positive or negative depending on the comparative power of shareholders within the corporate governance structure of each bank. Andries and Nistor (2016) provide similar evidence from ten Central Eastern European (CEE) countries, concluding that the impact of corporate governance policies on systemic risk is affected by the tightness of three types of regulations, namely supervisory power, capital requirements and activity restrictions. Finally, using data from 54 countries, De Vita and Luo (2018) conclude that with the exception of capital requirements, other tools that relate to the pillars of Basel II, namely market discipline and 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.…”

Bank systemic risk: An analysis of the sovereign rating ceiling policy and rating downgrades

“…In this section, we expand our baseline analysis by including some corporate governance controls as these can affect bank systemic risk (Andrieş & Nistor, 2016). In particular, following Díez‐Esteban et al.…”

“…In this section, we expand our baseline analysis by including some corporate governance controls as these can affect bank systemic risk (Andrieş & Nistor, 2016). In particular, following Díez-Esteban et al (2021) we include the annual percentage of female board members (Female directors) and independent board members (Independent board directors) and the total number of board members (Board size) for each bank.…”