Risk-taking behaviour and ownership in the banking industry: The Spanish evidence

The Use of Credit Derivatives and Banks′ Risk Taking Behaviours

“…Besides, large bank are more capable of taking higher leverage and more risky portfolios in pursue of profit (Saunders et al, 1990). However, this finding reveals negative coefficients at significant level of 99% in both models, which is tend to support the evidence found in studies of Garcia-Marco and Robles-Fernandez (2008) that larger banks are more likely to have relatively less risky assets. They explain that large banks tend to have more available access to cheap capital and are able to diversify their activities across industries and geographical regions.…”

The Moderating Role of Corporate Governance on the Relationship between a Firm’s Product Lifecycle and Risk-Taking

“…This risk aversion attitude may guide them to select less risky investments or to operate with larger amounts of capital than what stockholders would define as optimal (García-Marco & Robles-Fernández 2008). These managers will avoid very risky strategies in an attempt to keep their jobs and because they will not receive any extra compensation for getting a higher return by adopting a greater risk, they have no incentive to select risky projects (Rasmussen 1988;Masulis 1987).…”

“…These managers will avoid very risky strategies in an attempt to keep their jobs and because they will not receive any extra compensation for getting a higher return by adopting a greater risk, they have no incentive to select risky projects (Rasmussen 1988;Masulis 1987). But, if a sufficient concentration of the ownership structure exists, the agency problem may be attenuated and the degree of risk aversion among managers could be monitored (García-Marco & Robles-Fernández 2008).…”

Culture, Board Composition and Corporate Social Reporting in the Banking Sector

“…Banks have a higher number of interest groups than non-financial organizations (Mehran et al 2011) because there are agents who are specific to the banking sector, for example depositors, debt holders, deposit insurance authorities and so on. In this regard, corporate governance in banks is relatively more important than in other sectors, because internal conflicts may cause a loss of confidence of the market on the ability of financial institutions to manage investments, which may result finally in financial crisis (García-Marco and Robles-Fernandez 2008). Moreover, the analysis of the association between the professional background of board members and CSR Independent directors are professionals without any relationship with the management of the company, so it is improbable that they interfere in corporate decisions with their personal opinions (Wan-Hussin 2009).…”