Governance Mechanisms in Spanish Financial Intermediaries

Rafel Crespi-Cladera, Miguel A. García Cestona (cestona@selene.uab.es) and Vicente Salas (vsalas@posta.unizar.es)
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Miguel A. García Cestona: Departament d'Economia de l'Empresa, Universitat Autònoma de Barcelona.
Vicente Salas: Universidad de Zaragoza.

No 209, Working Papers from Departament Empresa, Universitat Autònoma de Barcelona

Abstract: This paper examines the governance of Spanish Banks around two main issues. First, does a poor economic performance activate those governance interventions that favor the removal of executive directors and the merger of non-performing banks? And second, does the relationship between governance intervention and economic performance vary with the ownership form of the bank? Our results show that a bad performance does activate governance mechanisms in banks, although for the case of Savings Banks intervention is confined to a merger or acquisition. Nevertheless, the distinct ownership structure of Savings Banks does not fully protect non-performing banks from disappearing. Product-market competition compensates for those weak internal governance mechanisms that result from an ownership form which gives voice to several stakeholder groups.

Keywords: Corporate governance; commercial and savings banks; executive turnover; mergers and acquisitions. (search for similar items in EconPapers)
JEL-codes: G21 G34 G38 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2002-09, Revised 2002-09
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Published in Working Papers at the Department of Business, September 2002 pages 1-28

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