Dataset Information

Risky Business: Institutional Logics and Risk Taking at Large U.S. Commercial Banks.

ABSTRACT:

Objective

This article aims to answer whether increased securitization and/or increased shareholder value pressures at commercial banks have led to higher levels of risk.

Methods

Using data on large U.S. commercial banks from several sources, I estimate linear partial-adjustment models to predict the effects of securitization, as well as CEO incentives to increase shareholder value, on leverage.

Results

These models provide evidence that increases in the relative size of trading securities at a commercial bank are significantly associated with increases in leverage. Meanwhile, the relative size of total securities and CEO incentives to increase shareholder value do not appear to affect leverage.

Conclusion

These findings suggest that limiting commercial bank speculation in securities markets may reduce the likelihood that commercial banks face large losses or become insolvent in financial downturns.

SUBMITTER: LaBriola J

PROVIDER: S-EPMC6788859 | biostudies-literature | 2019 Feb

REPOSITORIES: biostudies-literature

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Publications

Risky Business: Institutional Logics and Risk Taking at Large U.S. Commercial Banks.

LaBriola Joe J

Social science quarterly 20181125 1

<h4>Objective</h4>This article aims to answer whether increased securitization and/or increased shareholder value pressures at commercial banks have led to higher levels of risk.<h4>Methods</h4>Using data on large U.S. commercial banks from several sources, I estimate linear partial-adjustment models to predict the effects of securitization, as well as CEO incentives to increase shareholder value, on leverage.<h4>Results</h4>These models provide evidence that increases in the relative size of tr ...[more]

PMID: 31607760

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Dataset Information

Risky Business: Institutional Logics and Risk Taking at Large U.S. Commercial Banks.

Objective

Methods

Results

Conclusion

Publications

Risky Business: Institutional Logics and Risk Taking at Large U.S. Commercial Banks.

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