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Boards of Banks

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  • Daniel Ferreira

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  • Tom Kirchmaier

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  • Daniel Metzger

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    Abstract

    We show that country characteristics explain most of the cross-sectional variation in bank board independence. In contrast, country characteristics have little explanatory power for the fraction of outside bank directors with experience in the banking industry. Exploiting the time-series dimension of the sample, we show that changes in bank characteristics are not robustly associated with changes in board independence, while changes in board experience are positively related to changes in bank size and negatively related to changes in performance. The evidence suggests that country-specific laws and regulations affect the composition of boards of banks mainly through requirements for director independence.

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    File URL: http://www.lse.ac.uk/fmg/workingPapers/discussionPapers/DP664_2010_BoardsofBanks.pdf
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    Bibliographic Info

    Paper provided by Financial Markets Group in its series FMG Discussion Papers with number dp664.

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    Date of creation: Jan 2011
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    Handle: RePEc:fmg:fmgdps:dp664

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    Web page: http://www.lse.ac.uk/fmg/

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    22. Vicente Cuñat & Luis Garicano, 2010. "Did Good Cajas Extend Bad Loans? Governance, Human Capital and Loan Portfolios," Working Papers 2010-08, FEDEA.
    23. Kroszner, Randall S. & Strahan, Philip E., 2001. "Bankers on boards: *1: monitoring, conflicts of interest, and lender liability," Journal of Financial Economics, Elsevier, vol. 62(3), pages 415-452, December.
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    25. Duchin, Ran & Matsusaka, John G. & Ozbas, Oguzhan, 2010. "When are outside directors effective?," Journal of Financial Economics, Elsevier, vol. 96(2), pages 195-214, May.
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    Cited by:
    1. Li, Li & Song, Frank M., 2013. "Do bank regulations affect board independence? A cross-country analysis," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 2714-2732.

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