Bank liquidity creation and risk-taking: : Does managerial ability matter?

By Panayiotis Ch. Andreou, Dennis Philip, P. P. Robejsek. 2016

133 citations recorded by the source corpus.

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 times of financial crisis, 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 times of crisis.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/83c43b180d5ff90c9c6c0cdc1fd62a9dbbcae202

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. C. Louca
2. Isabella Karasamani
3. Panayiotis Ch. Andreou
4. D. Ehrlich

In Finance

1. C. Louca
2. Isabella Karasamani
3. Panayiotis Ch. Andreou
4. D. Ehrlich

Citations in the corpus

• The Impact of Managerial Ability on Crisis-Period Corporate Investment (2017, background): “In the banking industry, Andreou et al. (2016) demonstrate that more able bank managers have the capacity to handle higher risks and to facilitate greater intermediation.”