Financial liberalization and bank risk-taking: International evidence

By E. Cubillas, F. González. 2014

184 citations recorded by the source corpus.

This paper analyzes the channels through which financial liberalization affects bank risk-taking in an international sample of 4333 banks in 83 countries. Our results indicate that financial liberalization increases bank risk-taking in both developed and developing countries but through different channels. Financial liberalization promotes stronger bank competition that increases risk-taking incentives in developed countries, whereas in developing countries it increases bank risk by expanding opportunities to take risk. Capital requirements help reduce the negative impact of financial liberalization on financial stability in both developed and developing countries. However, official supervision and financial transparency are only effective in developing countries.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/8ea67409e7c35a347492fe08a1d043d9a651a8b1

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In Accounting

1. Yun Luo
2. Glauco De Vita
3. Sailesh Tanna

In Economics and Econometrics

1. Sailesh Tanna
2. Yun Luo
3. Glauco De Vita

In Finance

1. Yun Luo
2. Glauco De Vita
3. Sailesh Tanna

Citations in the corpus

• Financial openness, risk and bank efficiency: Cross-country evidence (2016, background): “…too much inference from the signs of these estimated coefficients since without the estimation of interaction effects (see, for example, Cubillas and González, 2014) the significance of these regulatory and supervisory measures in counteracting the effects of Page 32 of 60 Ac ce pt…”