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The determinants of reputational risk in the banking sector

Franco Fiordelisi, Maria-Gaia Soana and Paola Schwizer

Journal of Banking & Finance, 2013, vol. 37, issue 5, 1359-1371

Abstract: What determines reputational loss following operational losses in banking? The purpose of this paper is to empirically address this question. We estimate the reputational risk for a large sample of banks in Europe and the US between 2003 and 2008. We have two main results. First, we provide evidence that there is the probability that reputational damage increases as profits and size increase. Second, we show that a higher level of capital invested and intangible assets reduce the probability of reputational damage.

Keywords: Reputational risk; Operational losses; Financial companies; Event study (search for similar items in EconPapers)
JEL-codes: G14 G21 (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1016/j.jbankfin.2012.04.021

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Handle: RePEc:eee:jbfina:v:37:y:2013:i:5:p:1359-1371