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A Study Of Interest Rate, Internal Governance And Bank Risk-taking

Posted on:2016-05-16Degree:MasterType:Thesis
Country:ChinaCandidate:N W DengFull Text:PDF
GTID:2309330479988502Subject:Finance
Abstract/Summary:PDF Full Text Request
The bank risk-taking will not only be affected by external environment, but also depends on the condition of the Banks themselves. After the 2008 financial crisis, many scholars have pointed out that it is the low interest rate environment makes the U.S. banking sector to take excessive risk and this caused the crisis happened. And international professional accountants organization ACCA pointed out that one cause of the crisis is the problems in corporate governance of commercial bank, for governance defects of banks will lead to excessive risk-taking.Based on the analysis above and from the two dimensions of internal and external, this paper take the interest rates as the external indicators and use the largest proportion of shareholders, scale of board, the proportion of independent directors and remuneration of president to measure the bank’s internal governance. So based on examining the relationship among interest rates, the internal governance and bank risk-taking, this paper construct a further study on whether the relationship between interest rates and bank risk-taking depends on the internal governance of commercial bank. Based on the panel data of 16 listed commercial Banks in China from 2007 to 2013 and GMM estimation method, the empirical analysis show that:(1) relationship between interest rates and bank risk-taking is negative;(2) higher the proportion the first shareholder holds, smaller the size of board, smaller the ratio of independent director and lower the pay of president will all lead to a higher bank risk-taking, and they may significantly affect bank risk-taking sensitivity to the interest rate.
Keywords/Search Tags:Interest Rate, Internal Corporate Governance, Bank Risk-taking
PDF Full Text Request
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