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Risk-taking behaviour and ownership in the banking industry: The Spanish evidence

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  • Garci­a-Marco, Teresa
  • Robles-Fernández, M. Dolores

Abstract

This paper analyses the determinants of risk-taking in Spanish financial intermediaries, with special emphasis on the ownership structure and size of the different entities. On the one hand, the specific legal configuration of Spanish Savings banks may lead them to differ from Commercial banks in their risk behaviour. In particular, they may invest in riskier projects. Nevertheless, other theories indicate that greater stockholder control in Commercial banks may induce them towards greater risk-taking in certain situations. In this paper we test these hypotheses with a dynamic panel data model (1993-2000) for Spanish Commercial banks and Savings banks. We analyse whether differences in risk behaviour are related to different ownership structures or to other factors such as the size of the entity.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economics and Business.

Volume (Year): 60 (2008)
Issue (Month): 4 ()
Pages: 332-354

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Handle: RePEc:eee:jebusi:v:60:y:2008:i:4:p:332-354

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Cited by:
  1. Ahlem Selma Messai & Fathi Jouini, 2013. "Micro and Macro Determinants of Non-performing Loan," International Journal of Economics and Financial Issues, Econjournals, vol. 3(4), pages 852 - 860.
  2. Anolli, Mario & Beccalli, Elena & Molyneux, Philip, 2014. "Bank earnings forecasts, risk and the crisis," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 29(C), pages 309-335.
  3. Phil Molyneux & Hong Liu & John O.S. Wilson, 2010. "Competition and Stability in European Banking: A Regional Analysis," Working Papers 10019, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
  4. Bowo Setiyono & Amine Tarazi, 2014. "Disclosure, ownership structure and bank risk: Evidence from Asia," Working Papers hal-00947590, HAL.

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