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Impact of Corporate Governance on Peruvian Banks' Financial Strength

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  • Derry Quintana Aguilar

    (Central Reserve Bank of Peru)

Abstract

International evidence has shown how the lack of proper corporate governance in banks increases risk management, thereby reducing their financial strength. This paper addresses how corporate governance in Peruvian banks is related to their financial strength. The measure of corporate governance includes variables such as Board`s compensations, shares concentration, transparency and market discipline. In turn, a measure of financial strength is built, including indicators of capital adequacy, asset quality, management, earnings, and liquidity. Most importantly, our results indicate that banks with higher corporate governance indices exhibit higher financial strength.

Suggested Citation

  • Derry Quintana Aguilar, 2016. "Impact of Corporate Governance on Peruvian Banks' Financial Strength," IHEID Working Papers 12-2016, Economics Section, The Graduate Institute of International Studies.
    • Handle: RePEc:gii:giihei:heidwp12-2016
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    References listed on IDEAS

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    More about this item

    Keywords

    Corporate Governance; Bank Performance; Government Policy.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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