6533b871fe1ef96bd12d17a5
RESEARCH PRODUCT
GOVERNANCE-BASED ACQUISITIONS AND RISK TAKING IN BANKING
Víctor E. BarriosLuis Granerosubject
FinanceEconomics and Econometricsbusiness.industryMarket for corporate controlCorporate governancemedia_common.quotation_subjectFinancial intermediaryFinancial systemInterest rateBank riskIncentiveLoanEconomicsbusinessRisk takingmedia_commondescription
We examine the market for corporate control in banking when strategic acquisitions are driven by the different governance structures of commercial and savings banks. In contrast to profit-maximizing entities, we show that savings institutions can have acquisition incentives from their peculiar governance and ownership structure. Governance-based acquisition incentives, which interact with the specifics of the loan market in affecting bank risk taking, can arise when acquisitions take place sequentially or simultaneously, and also when financial intermediaries affect risk taking directly through the target return of investments or indirectly through the loan interest rate.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2008-07-01 | The Manchester School |