| Item Type |
Monograph
(Working Paper)
|
| Abstract |
This paper investigates to what extent risk management and corporate governance mitigate the involvement of banks in credit boom and bust cycles. Using a unique, hand-collected dataset on 156 banks from Central and Eastern Europe during 2005-2012, we assess whether banks with stronger risk management and corporate governance display more moderate credit growth in the pre-crisis credit boom as well as a smaller credit contraction and fewer credit losses in the crisis period. With respect to bank governance we document that a higher share of financial experts on the supervisory board is associated with more rapid credit growth in the pre-crisis period and a larger contraction of credit in the crisis period, but not with larger credit losses. With respect to risk management we document that a strong risk committee is associated with more moderate pre-crisis credit growth but not with fewer credit losses in the crisis. We find no evidence of an organizational learning process among crisis-hit banks: those banks with the largest credit losses during the crisis are least likely to improve their risk management in the aftermath of the crisis. |
| Authors |
Brown, Martin & Andries, Alin Marius |
| Language |
English |
| Keywords |
Credit boom and busts, corporate governance, risk management |
| Subjects |
business studies |
| HSG Classification |
contribution to scientific community |
| Refereed |
No |
| Date |
2014 |
| Depositing User |
Prof. Dr. Martin Brown
|
| Date Deposited |
25 Sep 2014 12:32 |
| Last Modified |
02 Feb 2023 01:23 |
| URI: |
https://www.alexandria.unisg.ch/publications/235205 |
Credit Booms and Busts in Emerging Markets: The Role of Bank Governance and Risk Management
![[img]](http://www.alexandria.unisg.ch/style/images/fileicons/oa_orange.png)
