The Impact of Corporate Governance in the Banking Sector Performance: The Case of the 2007-2008 Financial Crisis

22 Pages Posted: 2 Dec 2010 Last revised: 18 Apr 2016

See all articles by Catarina Fernandes

Catarina Fernandes

Polytechnic Institute of Braganca

Jorge Farinha

University of Porto - Faculdade de Economia do Porto

Cesario Mateus

University of Roehampton

Date Written: February 15, 2011

Abstract

This research project aims to analyse the role of banks governance as an explanation to the recent financial crises. We claim to contribute to the current debate on the issue of governance mechanisms in explaining the performance of the banking sector, crucial to understanding of the 2007-2008 financial crises, in three important ways. Firstly, providing a unique and innovative analyse of the impact of board social and economic networks on bank performance, including political connections and business networks. Secondly, analysing the impact of deposit insurance on bank performance, considering both country and bank specific characteristics. Thirdly, analysing the banks’ characteristics that received government bailouts, namely in what concerns their corporate governance and try to shed more light on the extent to which banks’ governance characteristics determine the response to the financial crisis.

The sample consists of 181 publicly listed banks from EMU countries, between 2002 and 2009 subject to the following criteria (1) being listed at least 1 year before year of analysis and (2) do no changed its governance structure due to mergers or acquisitions (M&A), in order to exclude banks than, eventually, around M&A have influenced stocks prices and/or manipulate results.

Keywords: Corporate Governance, Banks, Financial Crises

JEL Classification: G2, G34

Suggested Citation

Fernandes, Catarina and Farinha, Jorge and Mateus, Cesario, The Impact of Corporate Governance in the Banking Sector Performance: The Case of the 2007-2008 Financial Crisis (February 15, 2011). Finance and Corporate Governance Conference 2011 Paper. Available at SSRN: https://ssrn.com/abstract=1717960 or http://dx.doi.org/10.2139/ssrn.1717960

Catarina Fernandes (Contact Author)

Polytechnic Institute of Braganca ( email )

Rua João Maria Sarmento Pimentel
Apartado 128
Braganca, Mirandela 5370-326
Portugal

Jorge Farinha

University of Porto - Faculdade de Economia do Porto ( email )

Rua Dr. Roberto Frias
Porto, 4200-464
Portugal
(351)-22-5575100 (Phone)
(351)-22-5505050 (Fax)

HOME PAGE: www.fep.up.pt

Cesario Mateus

University of Roehampton ( email )

Roehampton Lane
London, SW15 5PU
United Kingdom

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