Skilled Banker Mobility and Bank Default

Yuna Heo and Steven Ongena
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Yuna Heo: University of Basel - Faculty of Business and Economics; Swiss Finance Institute
Steven Ongena: University of Zurich - Department Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)

No 25-34, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: This study investigates the impact of skilled banker mobility risk on bank fragility. Using a novel measure of skilled banker mobility risk, we find that an increase in this risk raises the probability of bank default. The effect is more pronounced for banks facing higher competition and with a high proportion of non-performing loans. Further we show that labor mobility restriction laws can help mitigate the detrimental effect of skilled banker mobility risk. Our findings suggest that skilled banker mobility can exacerbate bank fragility, but proper policies can bolster resilience against possible adverse effects from labor market frictions.

Keywords: skilled banker; labor mobility; financial stability; distance-to-default; bank default probability; bank fragility (search for similar items in EconPapers)
JEL-codes: G15 G32 G38 Q54 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2025-03
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2534

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