The Relationship Between Asset-Liability Management and Governance Quality in the Banking Industry
Gregory G. Kaufinger,
Chris Neuenschwander
Abstract:This study investigates whether governance quality is associated with asset-liability management (ALM) within the US banking industry. Based on stewardship theory, we hypothesize that there ought to be a significant, positive association between bank governance quality and a strong balance sheet due to inherent fiduciary responsibility and internal controls associated with an ALM governance process. Due to endogeneity concerns, we employ two-stage least squares regression and examine the relationship between 1… Show more
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