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Ownership Structure, Deregulation, and Bank Risk Taking
Author(s) -
SAUNDERS ANTHONY,
STROCK ELIZABETH,
TRAVLOS NICKOLAOS G.
Publication year - 1990
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/j.1540-6261.1990.tb03709.x
Subject(s) - deregulation , shareholder , business , incentive , monetary economics , financial system , bank regulation , banking industry , economics , finance , market economy , corporate governance
This paper investigates the relationship between bank ownership structure and risk taking. It is hypothesized that stockholder controlled banks have incentives to take higher risk than managerially controlled banks and that these differences in risk become more pronounced in periods of deregulation. In support of this hypothesis, we show that stockholder controlled banks exhibit significantly higher risk taking behavior than managerially controlled banks during the 1979–1982 period of relative deregulation.