Empirical Study On The Impact Of Directors And Officers Liability Insurance On Risk Taking Of Listed Banks

After the outbreak of the US subprime mortgage crisis,it gradually spread to many countries and regions and evolved into an international financial crisis.Banks and other financial institutions have undergone extensive mergers and acquisitions,government takeovers and even bankruptcy.The risk-taking problem of the banking industry has gradually become the focus of relevant scholars,bank shareholders,managers and government agencies at home and abroad.The choice of risk-taking behavior of listed banks is the result of a combination of internal governance,market constraints and government regulation.Because the bank’s governance mechanism has a significant impact on the risk appetite of decision-making participants,and directors and officers liability insurance can play an important role in bank governance because of its additional governance effect,this paper studies from the perspective of listed bank governance.The impact of insured director liability insurance on the risk exposure of listed banks.In recent years,on the basis of foreign research,Chinese scholars have carried out in-depth research on directors and officers liability insurance from two aspects of demand motivation and governance effect,and gradually formed a systematic theory,but whether it is foreign or domestic director liability insurance There is much controversy about the governance effect of enterprises.Based on the perspective of corporate governance,this paper studies and analyzes the mechanism of directors and officers liability insurance on the risk-taking of listed banks.In the research process,two methods of theoretical derivation and empirical test are mainly used.This paper first collects and collates the literatures on the relationship between risk-taking behavior,directors and officers liability insurance and capital supervision at home and abroad.On this basis,it constructs the theoretical analysis framework of directors and officers liability insurance affecting the risk-taking of listed banks,and analyzes both positive and negative aspects.Possible impact path.Secondly,it draws on the model of domestic and foreign scholars to propose that directors and officers liability insurance affects the risk-dependent regression model of listed banks in China.Then,the data of 16 domestic listed banks in 2007-2016 were selected to investigate the impact of the introduction of director liability insurance on the risk exposure of listed banks through empirical research,and further study the interaction between director liability insurance and capital supervision on the risk of listed banks.influences.The empirical findings:(1)The positive effect introduced by the purchase of director liability insurance for listed banks buffers the negative effects caused by it,and the overall performance is the continuous improvement of the governance mechanism of listed banks,which in turn reduces the risk exposure of listed banks,and With the expansion of the coverage of directors’ liability insurance,the introduction of governance effects is more pronounced.(2)After incorporating the proxy variables of capital supervision,we found that strengthening capital supervision can make the external supervision effect and signal transmission effect of director liability insurance play a more effective role,thus realizing the impact on director liability insurance and listed bank risk commitment.The regulatory effect of the mechanism.The empirical results show that capital regulation,whether measured by capital adequacy ratio or statutory deposit reserve ratio,can enhance the negative correlation between the liability insurance and the risk exposure of listed banks.In the robustness test,similar results were obtained through the method of variable substitution,indicating that the liability insurance for insured directors has a positive impact on reducing the risk exposure of listed banks.Finally,based on the empirical results we obtained,this paper puts forward the countermeasures and suggestions for improving the director liability insurance system from the perspectives of political and legal environment,bank internal governance and insurance companies..The main contributions of the article are as follows: Firstly,this paper takes the director liability insurance as the research perspective,which can enrich the domestic research system on the influencing factors of bank risk-taking,and provide new solutions for the improvement of the governance mechanism of listed banks in China.Secondly,the risk-taking of listed banks For the research object,it can also enrich and expand the research literature on the economic consequences of director liability insurance.Finally,by revealing the mechanism of director liability insurance affecting the risk exposure of banking institutions,it affirms the positive effect of the introduction of directors and officers liability insurance.The dispute over liability provides an empirical basis and lays a theoretical foundation for the development and promotion of directors and officers liability insurance in China.