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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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  • Garci­a-Marco, Teresa & Robles-Fernández, M. Dolores, 2008. "Risk-taking behaviour and ownership in the banking industry: The Spanish evidence," Journal of Economics and Business, Elsevier, vol. 60(4), pages 332-354.
  • Handle: RePEc:eee:jebusi:v:60:y:2008:i:4:p:332-354
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    Cited by:

    1. Hong Liu & Phil Molyneux & John O. S. Wilson, 2013. "Competition And Stability In European Banking: A Regional Analysis," Manchester School, University of Manchester, vol. 81(2), pages 176-201, March.
    2. Keffala, Mohamed Rochdi, 2015. "How using derivatives affects bank stability in emerging countries? Evidence from the recent financial crisis," Research in International Business and Finance, Elsevier, vol. 35(C), pages 75-87.
    3. Butzbach Olivier & von Mettenheim Kurt E., 2015. "Alternative Banking and Theory," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 5(2), pages 105-171, July.
    4. Bowo Setiyono & Amine Tarazi, 2014. "Disclosure, ownership structure and bank risk: Evidence from Asia," Working Papers hal-00947590, HAL.
    5. Abdelkader Boudriga & Neila Boulila Taktak & Sana Jellouli, 2010. "Bank Specific, Business and Institutional Environment Determinants of Banks Nonperforming Loans: Evidence from MENA Countries," Working Papers 547, Economic Research Forum, revised 09 Jan 2010.
    6. 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.
    7. repec:wsi:rpbfmp:v:20:y:2017:i:01:n:s0219091517500047 is not listed on IDEAS
    8. Chiaramonte, Laura & Croci, Ettore & Poli, Federica, 2015. "Should we trust the Z-score? Evidence from the European Banking Industry," Global Finance Journal, Elsevier, vol. 28(C), pages 111-131.
    9. Ivana Catturani & Erika Dalpiaz, 2017. "Alternative classifications of Italian banks:Do different grouping rules mislead results on the risk profile of banks?," DEM Working Papers 2017/11, Department of Economics and Management.
    10. repec:eee:respol:v:47:y:2018:i:2:p:527-541 is not listed on IDEAS
    11. Lassoued, Naima & Sassi, Houda & Ben Rejeb Attia, Mouna, 2016. "The impact of state and foreign ownership on banking risk: Evidence from the MENA countries," Research in International Business and Finance, Elsevier, vol. 36(C), pages 167-178.
    12. Dong, Yizhe & Meng, Chao & Firth, Michael & Hou, Wenxuan, 2014. "Ownership structure and risk-taking: Comparative evidence from private and state-controlled banks in China," International Review of Financial Analysis, Elsevier, vol. 36(C), pages 120-130.
    13. International Monetary Fund, 2012. "Spain; The Reform of Spanish Savings Banks Technical Notes," IMF Staff Country Reports 12/141, International Monetary Fund.
    14. Nasir Ali & Najeeb Muhammad Nasir & Saqlain Latif Satti, 2014. "The Effect of Corporate Governance on Capital Structure Decisions – A Case of Saudi Arabian Banking Sector," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 10(2), pages 51-60, April.
    15. 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.
    16. Barbara Casu & Claudia Girardone & Philip Molyneux, 2012. "Is There a Conflict between Competition and Financial Stability?," Chapters,in: Research Handbook on International Banking and Governance, chapter 3 Edward Elgar Publishing.
    17. Christian H Ebeke & Boileau Loko & Arina Viseth, 2014. "Credit Quality in Developing Economies; Remittances to the Rescue?," IMF Working Papers 14/144, International Monetary Fund.
    18. Kondo, Kazumine, 2018. "The Governance Structures of Japanese Credit Associations and Their Objective Functions," MPRA Paper 85294, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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