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How the corporate governance mechanisms affect bank risk taking

Emmanuel Mamatzakis, Xiaoxiang Zhang and Chaoke Wang

MPRA Paper from University Library of Munich, Germany

Abstract: The effectiveness of the management team, ownership structure and other corporate governance systems in determining appropriate risk taking is a critical issue in a modern commercial bank. Appropriate risk management techniques and structures within financial institutions play an important role to ensure the stability of economy. After analyzing 43 Asian banks over the period from 2006 to 2014, I find that banks with strong corporate governance are associated with higher risk taking. More specifically, banks with intermediate size of board, separation of CEO and chairman of board, and audited by Big Four audit firm, are likely higher risk taking. Overall, my findings provide some new perspectives into the governance mechanisms that affect risk taking on commercial banks.

Keywords: Banks; Risk taking; Corporate governance (search for similar items in EconPapers)
JEL-codes: G21 G32 G39 (search for similar items in EconPapers)
Date: 2017-04-04
New Economics Papers: this item is included in nep-ban, nep-bec, nep-cfn and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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