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Governance Mechanisms in Spanish Financial Intermediaries

Author

Listed:
  • Rafel Crespí

    (Departament Economia i Empresa, Universitat Illes Balears)

  • Miguel A. García-Cestona

    (Departament d'Economia de l'Empresa, Universitat Autonoma de Barcelona)

  • Vicente Salas Fumas

    (Departamento de Economia y Direccion de Empresas, Universidad de Zaragoza)

Abstract

This paper examines the governance of Spanish Banks around two main issues. First, does a poor economic performance activate those governance interventions that favor the removal of executive directors and the merger of non-performing banks? And second, does the relationship between governance intervention and economic performance vary with the ownership form of the bank? Our results show that a bad performance does activate governance mechanisms in banks, although for the case of Savings Banks intervention is confined to a merger or acquisition. Nevertheless, the distinct ownership structure of Savings Banks does not fully protect non-performing banks from disappearing. Product-market competition compensates for those weak internal governance mechanisms that result from an ownership form which gives voice to several stakeholder groups.

Suggested Citation

  • Rafel Crespí & Miguel A. García-Cestona & Vicente Salas Fumas, 2002. "Governance Mechanisms in Spanish Financial Intermediaries," Working Papers 200209, Departament Empresa, Universitat Autònoma de Barcelona.
    • Handle: RePEc:bbe:wpaper:200209
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    File URL: http://selene.uab.es/dep-economia-empresa/documents/02-9.pdf
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    More about this item

    Keywords

    Corporate governance; commercial and savings banks; executive turnover; mergers and acquisitions;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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