The Risk Weighted Ownership Index: an ex-ante measure of banks' risk and performance

Luca Bellardini (), Pierluigi Murro and Daniele Previtali ()
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Luca Bellardini: University of Rome Tor Vergata
Daniele Previtali: University of Naples Parthenope

No 1904, Working Papers CASMEF from Dipartimento di Economia e Finanza, LUISS Guido Carli

Abstract: Attributing ratings to the top-20 owners, we construct a Risk-Weighted Ownership index (RWO) to measure the profitability and risk-taking behaviour of the ownership structure at banks. Collecting data from 19 European countries plus the UK over the 2008-2017 period, preliminary results show strong evidence that RWO measures are significant in explaining bank performance and risk, at both an accounting and a market-based level. Overall, these results suggest that not only markets and regulators should look at bank’s owners: instead, it is far more relevant to assess the contribution carried by top-owners to bank risk, both individually and collectively.

Keywords: bank; ownership; risk; corporate governance (search for similar items in EconPapers)
JEL-codes: G21 G32 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2019-04
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-eur and nep-rmg
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