Factors affecting bank risk taking: Evidence from Japan

Konishi, Masaru; Yasuda, Yukihiro

doi:10.1016/s0378-4266(02)00405-3

Cited by 245 publications

(210 citation statements)

References 15 publications

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“…For example, Keeley and Furlong [18] and Furlong and Keeley [19] argue that higher regulatory capital requirements, by reducing the moral hazard problem generated by deposit insurance, decrease incentives for banks to take on higher risk. Similarly, empirical studies, such as Jacques and Nigro [5] for U.S. banks, Ediz, Michael and Perraudin [4] for U.K. banks, Konishi and Yasuda [20] for Japanese banks, Ma et al [21] for Chinese banks, and Maji and De [22] for Indian banks, find a negative association between bank capital and risk-taking.…”

Section: Literature Reviewmentioning

confidence: 92%

Capital Regulation and Bank Risk-Taking Behavior: Evidence from Pakistan

Ashraf

Arshad

Yuan-cheng

2016

IJFS

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Abstract:In response to the global financial crisis of [2007][2008][2009], risk-based capital requirements have been reinforced in the new Basel III Accord to counter excessive bank risk-taking behavior. However, prior theoretical as well as empirical literature that studies the impact of risk-based capital requirements on bank risk-taking behavior is inconclusive. The primary purpose of this paper is to examine the impact of risk-based capital requirements on bank risk-taking behavior, using a panel dataset of 21 listed commercial banks of Pakistan over the period [2005][2006][2007][2008][2009][2010][2011][2012]. Purely regulatory measures of bank capital, capital adequacy ratio, and bank assets portfolio risk, risk-weighted assets to total assets ratio, are used for the main analysis. Recently developed small N panel methods (bias corrected least squares dummy variable (LSDVC) method and system GMM method with instruments collapse option) are used to control for panel fixed effects, dynamic dependent variables, and endogenous independent variables. Overall, the results suggest that commercial banks have reduced assets portfolio risk in response to stringent risk-based capital requirements. Results also confirm that all banks having risk-based capital ratios either lower or higher than the regulatory required limits, have decreased portfolio risk in response to stringent risk-based capital requirements. The results are robust to alternative proxies of bank risk-taking, alternative estimation methods, and alternative samples.

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Section: Literature Reviewmentioning

confidence: 92%

Capital Regulation and Bank Risk-Taking Behavior: Evidence from Pakistan

Ashraf

Arshad

Yuan-cheng

2016

IJFS

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“…The percentage of total directors who represent the state (Konishi and Yasuda, 2004) Annual report of banks…”

Section: Statmentioning

confidence: 99%

Did Board of Directors Have an Impact on MENA Bank Performance?

Boussaada¹,

Karmani²

2015

IJEF

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This paper examines the impact of board of directors on the variability of bank performance in the Middle East and North Africa (MENA) region. Based on a sample of 38 banks during 2004-2011, we examine the impact of board characteristics on performance. Our results show that as the size of a bank's board of directors decreases its performance increases. However, the presence of CEO duality, independent and institutional directors in the board of directors is not significant in explaining performance differences between MENA banks. In addition, the results highlight the fact that state directors undermine the performance while foreign directors are relevant to strengthen the performance in MENA banks. Indeed, our findings highlight the importance of foreign members in enhancing banks performance.

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“…At last, the regression results of the (7), (8) in Table 4 showed that the two rights separation degree and the rate of Risk- Note: Coefficients marked with ***, **, and * are significant at 1%, 5%, and 10% level, respectively.…”

Section: The Empirical Resultsmentioning

confidence: 96%

“…are not consistent, management may take a conservative investment strategy to maintain its status. Konishi et al [8] used recent data from Japan to study risk-taking behavior of commercial banks. They found out that the relationship between the stable shareholders' ownership and bank risk is nonlinear.…”

Section: Research Hypothesismentioning

confidence: 99%

Commercial Bank Ownership Structure and Risk Preference

Zhong¹

2017

JMF

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Company's risk-taking behavior has a significant impact on corporate earnings' growth and the social economic development, and different ownership structure will affect the company's risk preference. In this paper, with the 25 Chinese listed banks, the empirical tests the effect of ownership structure on bank's risk preference. The result showed that the correlation between ownership concentration and the bank's risk preference is positive; the bank's risk preference and shareholding separation have inverted u-shaped relation; the correlation between bank's equity balance and the bank's risk preference is negative; the correlation between bank's cash flow rights and voting rights divergence and the bank's risk preference is in inverted u-shaped.

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Factors affecting bank risk taking: Evidence from Japan

Cited by 245 publications

References 15 publications

Capital Regulation and Bank Risk-Taking Behavior: Evidence from Pakistan

Capital Regulation and Bank Risk-Taking Behavior: Evidence from Pakistan

Did Board of Directors Have an Impact on MENA Bank Performance?

Commercial Bank Ownership Structure and Risk Preference

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