Systemic risk in European banks: Does ownership structure matter?

Nadia Saghi-Zedek (), Zainab Srour, Jean-Laurent Viviani () and Mohamad Jezzini
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Nadia Saghi-Zedek: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique
Zainab Srour: RHU - Rafik Hariri University
Jean-Laurent Viviani: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique
Mohamad Jezzini: LU / ULB - الجامعة اللبنانية [بيروت] = Lebanese University [Beirut] = Université libanaise [Beyrouth]

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Abstract: We empirically test whether ownership concentration explains the cross-variation in systemic risk contribution for a sample of European banks over the 2004–2021 period and how this effect may vary depending on the category of the largest controlling shareholder. We explore two potential contagion channels: the risk-taking incentives and banks' assets commonality. The results show that higher ownership concentration is associated with greater banks' systemic risk contribution. Moreover, we find that banks' systemic risk contribution is even stronger for banks where institutional investors or States are the largest controlling owners. Overall, our findings contribute to the literature examining the determinants of banks' systemic risk in particular and financial stability as a whole and have several policy implications. © 2023 Board of Trustees of the University of Illinois

Keywords: European banking; Ownership structure; Systemic risk contribution (search for similar items in EconPapers)
Date: 2023
Note: View the original document on HAL open archive server: https://hal.science/hal-04227882
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Published in Quarterly Review of Economics and Finance, 2023, 92, pp.88-111. ⟨10.1016/j.qref.2023.07.009⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04227882

DOI: 10.1016/j.qref.2023.07.009

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