Do bank insiders impede equity issuances?

Martin Goetz, Luc Laeven and Ross Levine ()

No 2511, Working Paper Series from European Central Bank

Abstract: We evaluate the role of insider ownership in shaping banks’ equity issuances in response to the global financial crisis. We construct a unique dataset on the ownership structure of U.S. banks and their equity issuances and discover that greater insider ownership leads to less equity issuances. Several tests are consistent with the view that bank insiders are reluctant to reduce their private benefits of control by diluting their ownership through equity issuances. Given the connection between bank equity and lending, the results stress that ownership structure can shape the resilience of banks—and hence the entire economy—to aggregate shocks. JEL Classification: G32, G21, G28

Keywords: banking; equity issuances; financial crisis; ownership structure; regulation (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-ban and nep-cba
Note: 261593
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Do Bank Insiders Impede Equity Issuances? (2020)
Working Paper: Do Bank Insiders Impede Equity Issuances? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20212511

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