Systemic Risk: Bank Characteristics Matter

Sharif Mazumder () and Louis R. Piccotti ()
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Sharif Mazumder: Northern Kentucky University
Louis R. Piccotti: Oklahoma State University

Journal of Financial Services Research, 2023, vol. 64, issue 2, No 4, 265-301

Abstract: Abstract We systematically examine the relationship between a bank’s characteristics and its exposure to systemic risk. We find that tier 1 requirements are negatively associated with a bank’s exposure, while size has a positive association. This association is nonlinear because larger banks contribute more than their smaller competitors. Banks with greater financial constraints are less exposed to systemic risk. We find evidence that geographic distance between banks has a negative relationship with systemic risk and that institutional ownership has a positive one. Finally, we find that the risk-taking attributes of the board and the CEO have a positive association with systemic risk.

Keywords: Systemic risk; Financial contagion; Corporate finance; Corporate governance (search for similar items in EconPapers)
JEL-codes: G21 G30 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10693-022-00386-z

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