Who Disciplines Bank Managers?
By Andréa M. Maechler, K. Schaeck, M. Čihák, Stéphanie Stolz. Social Science Research Network, 2009
137 citations recorded by the source corpus.
We bring to bear a hand-collected dataset of executive turnovers in U.S. banks to test the efficacy of market discipline in a 'laboratory setting' by analyzing banks that are less likely to be subject to government support. Specifically, we focus on a new face of market discipline: stakeholders' ability to fire an executive. Using conditional logit regressions to examine the roles of debtholders, shareholders, and regulators in removing executives, we present novel evidence that executives are more likely to be dismissed if their bank is risky, incurs losses, cuts dividends, has a high charter value, and holds high levels of subordinated debt. We only find limited evidence that forced turnovers improve bank performance.
View Paper: https://www.semanticscholar.org/paper/588b00cb5b317347388265c0c3d7b989bea7ca81
How researchers see this paper
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- Muhammad Safiullah
- Abul Shamsuddin
- Pejman Abedifar
- Amine Tarazi
- Giuseppe Torluccio
- Enrico Onali
- Denefa Bostandzic
- Ramilya Galiakhmetova
Citations in the corpus
- CEO Power, Government Monitoring, and Bank Dividends (2016, background): “However, CEO Turnover may depend on dividends, since dividend cuts may lead to CEO dismissal ( Schaeck et al., 2012 ).”
- Risk in Islamic banking and corporate governance (2018, background): “The use of an unmatched sample in a comparative research setting may cause sample selection bias (Schaeck et al., 2012), and hence the resulting evidence can be influenced by a confounding factor rather than the true underlying relationship between the variables of interest (Ho et al., 2007; Dunlap…”
- Why do some banks contribute more to global systemic risk? (2018, methodology): “, by Schaeck et al. (2012) who analyze the effects of executive turnovers at banks.”
- Risk in Islamic Banking (2012, methodology): “…risk analysis, we employ the Zscore measure which is widely used in the literature as a stability indicator (see, for instace, Goyeau and Tarazi, 1992; Boyd and Runkle, 1993; Lepetit et al., 2008a; Hesse and Čihák, 2007; Čihák et al., 2009; Laeven and Levine, 2009; Čihák and Hesse, 2010).”