Bank CEO risk-taking incentives and bank lending quality

被引：0
作者：
Rui-Xiang Zhai
Po-Hsin Ho
Chih-Yung Lin
Tran Thi Thuy Linh
机构：
[1] National Kaohsiung University of Science and Technology,Department of Money and Banking
[2] National Central University,Department of Finance
[3] National Yang Ming Chiao Tung University,Department of Information Management and Finance
[4] Thai Nguyen University of Economics and Business Administration,Department of Banking and Finance
来源：
Review of Quantitative Finance and Accounting | 2023年 / 60卷
关键词：
CEO risk-taking incentives; Bank loan contracts; Cumulative abnormal returns; Corporate governance; Lending quality; G21; G32; G34;
D O I：
暂无
中图分类号：
学科分类号：
摘要：
We investigate how bank CEO risk-taking incentives (Vega) influence lending decisions. We find that Vega is negatively related to the cumulative abnormal returns around loan announcements for banks. Our evidence shows that banks with high Vega charge a significantly lower loan spread, demand fewer loan covenants, and have a lower probability of requesting collateral. The results become weaker when banks have strong corporate governance mechanisms. We conduct a difference-in-differences analysis of banks who receive troubled asset relief program (TARP) funding that puts pressure on banks to reduce their option. We find that the Vega effect significantly declines after TARP.
引用
收藏
页码：949 / 981
页数：32
相关论文
共 187 条
[71]  
Naveen L(2013)Management quality and the cost of debt: does management matter to lenders? J Bank Finance 37 61-81
[72]  
Coles JL(2015)The role of dynamic renegotiation and asymmetric information in financial contracting J Financ Econ 116 159-184
[73]  
Daniel ND(2009)Renegotiation of financial contracts: evidence from private credit agreements J Financ Econ 93 2730-2756
[74]  
Naveen L(2010)The “dominant bank effect:” how high lender reputation affects the information content and terms of bank loans Rev Financ Stud 23 787-830
[75]  
Core J(2018)Bank capital and lending relationships J Financ 73 517-534
[76]  
Guay W(1997)Bank loan commitment contracts: data, theory, and tests J Money Credit Bank 29 1057-1071
[77]  
Core J(1992)Firm size and the information content of bank loan announcements J Bank Finance 16 391-405
[78]  
Holthausen R(1985)The determinants of firms’ hedging policies J Financ Quant Anal 20 629-668
[79]  
Larcker D(2007)Information asymmetry and financing arrangements: evidence from syndicated loans J Finance 62 431-460
[80]  
Dahiya S(1988)Outside directors and CEO turnover J Financ Econ 20 817-838
3456789101112