Professor Panayiotis Andreou panayiotis.andreou@durham.ac.uk
Professor
Bank liquidity creation and risk-taking: Does managerial ability matter?
Andreou, P.; Philip, D.; Robejsek, P.
Authors
Professor Dennis Philip dennis.philip@durham.ac.uk
Professor
P. Robejsek
Abstract
This study investigates the impact of managerial ability on banks' liquidity creation and risk-taking behavior. We find that higher ability managers create more liquidity and take more risk. During financial crisis times, however, higher ability bank managers reduce liquidity creation as a way to de-leverage their balance sheets. Our findings inform recent theoretical and empirical studies that investigate determinants of liquidity creation and risk by introducing managerial ability as a prominent antecedent of the banks' intermediation and risk-transforming service. Moreover, this study has policy-related implications, since managerial ability can be quantified as a key performance indicator for prudential supervision of banks and could help regulators to target intervention efforts more purposefully during crisis times.
Citation
Andreou, P., Philip, D., & Robejsek, P. (2016). Bank liquidity creation and risk-taking: Does managerial ability matter?. Journal of Business Finance and Accounting, 43(1-2), 226-259. https://doi.org/10.1111/jbfa.12169
Journal Article Type | Article |
---|---|
Acceptance Date | Nov 5, 2015 |
Online Publication Date | Mar 14, 2016 |
Publication Date | Jan 1, 2016 |
Deposit Date | Nov 9, 2015 |
Publicly Available Date | Mar 28, 2024 |
Journal | Journal of Business Finance and Accounting |
Print ISSN | 0306-686X |
Electronic ISSN | 1468-5957 |
Publisher | Wiley |
Peer Reviewed | Peer Reviewed |
Volume | 43 |
Issue | 1-2 |
Pages | 226-259 |
DOI | https://doi.org/10.1111/jbfa.12169 |
Keywords | Financial institutions, Managerial ability, Liquidity creation, Risk-taking, Financial crisis. |
Public URL | https://durham-repository.worktribe.com/output/1398379 |
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Copyright Statement
This is the accepted version of the following article: Andreou, P., Philip, D. and Robejsek, P. (2015). Bank Liquidity Creation and Risk-Taking: Does Managerial Ability Matter? Journal of Business Finance and Accounting. 43(1-2): 226–259, which has been published in final form at http://dx.doi.org/10.1111/jbfa.12169. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
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