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

Garci­a-Marco, Teresa and Robles-Fernández, M. Dolores
Authors registered in the RePEc Author Service: M. Dolores Robles Fernandez () and Teresa Garcia-Marco ()

Journal of Economics and Business, 2008, vol. 60, issue 4, pages 332-354

Abstract: This paper analyses the determinants of risk-taking in Spanish financial intermediaries, with special emphasis on the ownership structure and size of the different entities. On the one hand, the specific legal configuration of Spanish Savings banks may lead them to differ from Commercial banks in their risk behaviour. In particular, they may invest in riskier projects. Nevertheless, other theories indicate that greater stockholder control in Commercial banks may induce them towards greater risk-taking in certain situations. In this paper we test these hypotheses with a dynamic panel data model (1993-2000) for Spanish Commercial banks and Savings banks. We analyse whether differences in risk behaviour are related to different ownership structures or to other factors such as the size of the entity.

Date: 2008

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Persistent link: http://EconPapers.repec.org/RePEc:eee:jebusi:v:60:y:2008:i:4:p:332-354

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