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Do well-connected bank CEOs mitigate the impact of geopolitical risk on bank stability? Evidence from an emerging market

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  • Vashisht, Shailja
  • Mundi, Hardeep Singh

Abstract

We investigate the impact of geopolitical risk on bank stability in an emerging economy, India, and how the social networks of bank CEOs affect this relationship. Our findings establish a negative relationship between geopolitical risk and bank stability. However, well-connected CEOs mitigate these adverse effects through their social network, enhancing bank stability during geopolitical crises. Additionally, bank heterogeneity analysis highlights the roles of size, diversification, and capitalization in mitigating geopolitical risks.

Suggested Citation

  • Vashisht, Shailja & Mundi, Hardeep Singh, 2025. "Do well-connected bank CEOs mitigate the impact of geopolitical risk on bank stability? Evidence from an emerging market," Finance Research Letters, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:finlet:v:84:y:2025:i:c:s1544612325010359
    DOI: 10.1016/j.frl.2025.107777
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    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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