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Title: Bank Liquidity Creation and Risk-Taking: Does Managerial Ability Matter?
Authors: Andreou, Panayiotis 
Philip, Dennis 
Robejsek, Peter 
Keywords: Financial crisis;Financial institutions;Liquidity creation;Managerial ability;Risk-taking
Category: Economics and Business
Field: Social Sciences
Issue Date: 1-Jan-2016
Publisher: Blackwell Publishing Ltd
Source: Journal of Business Finance and Accounting, 2016, Volume 43, Issue 1-2, Pages 226-259
DOI: 10.1111/jbfa.12169
Abstract: This study investigates the impact of managerial ability on banks' liquidity creation and risk-taking behavior. We find that higher ability managers create more liquidity and take more risk. During times of financial crisis, however, higher ability bank managers reduce liquidity creation as a way to de-leverage their balance sheets. Our findings inform recent theoretical and empirical studies that investigate determinants of liquidity creation and risk by introducing managerial ability as a prominent antecedent of the banks' intermediation and risk-transforming service. Moreover, this study has policy-related implications, since managerial ability can be quantified as a key performance indicator for prudential supervision of banks and could help regulators to target intervention efforts more purposefully during times of crisis.
ISSN: 0306686X
Rights: © 2016 John Wiley & Sons Ltd.
Type: Article
Appears in Collections:Άρθρα/Articles

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