Subprime crisis and board (in-) competence: private versus public banks in Germany
Author: Hau, Harald ; Thum, MarcelINSEAD Area: FinanceIn: Economic Policy, vol. 24, no. 60, October 2009 Language: EnglishDescription: p. 701-752.Type of document: INSEAD ArticleNote: Please ask us for this itemAbstract: We examine evidence for a systematic underperformance of Germanys stateowned banks in the current financial crisis and study if the bank losses can be traced to the quality of bank governance. For this purpose, we examine the biographical background of 592 supervisory board members in the 29 largest banks and find a pronounced difference in the finance and management experience of board representatives across private and state-owned banks. Measures of boardroom competence are then related directly to the magnitude of bank losses in the recent financial crisis. Our data confirm that supervisory board (in-)competence in finance is related to losses in the financial crisis. Improved bank governance is therefore a suitable policy objective to reduce bank fragility| Item type | Current location | Call number | Status | Date due | Barcode | Item holds |
|---|---|---|---|---|---|---|
|
Europe Campus | Available | BC008895 |
Ask Qualtrics
We examine evidence for a systematic underperformance of Germanys stateowned banks in the current financial crisis and study if the bank losses can be traced to the quality of bank governance. For this purpose, we examine the biographical background of 592 supervisory board members in the 29 largest banks and find a pronounced difference in the finance and management experience of board representatives across private and state-owned banks. Measures of boardroom competence are then related directly to the magnitude of bank losses in the recent financial crisis. Our data confirm that supervisory board (in-)competence in finance is related to losses in the financial crisis. Improved bank governance is therefore a suitable policy objective to reduce bank fragility
Digitized
There are no comments for this item.