12.03.2024 • 8/2024
Risk in the banking sector: four out of ten top supervisors come from the financial industry
Europe's banks realise excess returns on the stock market when their alumni join the boards of national supervisory authorities. A study by the Halle Institute for Economic Research (IWH) shows that this happens more frequently than previously recognised. The findings indicate a risk to financial stability and call for a more merit-based, transparent appointment of senior regulators.
Michael Koetter
Read press release
Homepage
Headwinds from Germany and abroad: institutes revise forecast significantly downwards According to Germany’s five...
See page
Joint Economic Forecast
Joint Economic Forecast The joint economic forecast is an instrument for evaluating...
See page
Mayer ref rec
Refereed Publications ...
See page
CompNet Database
The CompNet Competitiveness Database The Competitiveness Research Network (CompNet)...
See page
Wirtschaft im Wandel
Wirtschaft im Wandel Die Zeitschrift „Wirtschaft im Wandel“ will eine breite...
See page
Working Papers
Macroeconomic Effects from Sovereign Risk vs. Knightian Uncertainty ...
See page
Centre for Evidence-based Policy Advice
Centre for Evidence-based Policy Advice (IWH-CEP) ...
See page
14.02.2023 • 4/2023
Study on Europe's top bankers: Risky business despite bonus cap
Ten years ago, the EU Parliament decided to cap the flexible remuneration of bank managers. But the cap on bonuses misses its target: Managers of systemically important European banks take high risks without changes, shows a study by the Halle Institute for Economic Research (IWH).
Michael Koetter
Read press release
Corporate Culture and Firm Value: Evidence from Crisis
Yiwei Fang, Franco Fiordelisi, Iftekhar Hasan, Woon Sau Leung, Gabriel Wong
Journal of Banking and Finance,
January
2023
Abstract
Based on the Competing Values Framework (CVF), we score 10-K text to measure company culture in four types (collaborative, controlling, competitive, and creative) and examine its role in firm stability. We find that firms with higher controlling culture fared significantly better during the 2008–09 crisis. Firms with stronger controlling culture experienced fewer layoffs, less negative asset growth, greater debt issuance, and increased access to credit-line facilities during the crisis. The positive effect of the controlling culture is stronger among the financially-constrained firms. Overall, the controlling culture improves firm stability through greater support from capital providers.
Read article