How sensitive are bank managers to shareholder value?

Date
2012
Authors
Caner, S.
Özyıldırım, S.
Ungan, A. E.
Advisor
Supervisor
Co-Advisor
Co-Supervisor
Instructor
Source Title
Journal of Financial Services Research
Print ISSN
0920-8550
Electronic ISSN
Publisher
Springer New York
Volume
42
Issue
3
Pages
187 - 205
Language
English
Type
Article
Journal Title
Journal ISSN
Volume Title
Series
Abstract

We test for the existence of market discipline by shareholders of banks with a wide range of ownership structures. Discipline by shareholders manifests itself through monitoring banks' level of risk as well as through influencing banks' management actions. We find that shareholders utilize the relation between stock returns and different types of risk measures to monitor risky banks. Shareholders partially influence bank management by responding to decreasing stock returns with a demand to improve loan quality. Moreover, the influence on management in small banks is more pronounced compared to large banks.

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Other identifiers
Book Title
Keywords
Bank monitoring, Market discipline, Shareholder influence, Stock returns
Citation
Published Version (Please cite this version)