Bank Risk and National Governance in Asia

39 Pages Posted: 27 Mar 2013 Last revised: 11 Aug 2014

See all articles by Barry Williams

Barry Williams

Department of Banking and Finance; Financial Research Network (FIRN)

Date Written: June 28, 2014

Abstract

The role of national governance upon bank-level risk in the Asian region is analysed. Improvements in national governance are risk reducing at the bank level in developed nations in the Asian region, and over the longer run for those nations affected by the Asian Financial Crisis. A U-shaped relationship between bank risk and bank capital is found, and it is argued that the risk reducing impact of increased capital holdings is close to satiation for developed nations in particular. Evidence of risk seeking due to ‘too big to fail’ effects is observed; with improved national governance able to partially offset some of the moral hazard due to size in developed nations, but not in developing nations. In developing nations increased size interacts with improved national governance to result in increased bank risk.

Keywords: National Governance, Bank Risk, Asian Banks, ASEAN

JEL Classification: G21, G28, G38, C33

Suggested Citation

Williams, Barry, Bank Risk and National Governance in Asia (June 28, 2014). Systemic Risk: Liquidity Risk, Governance and Financial Stability Conference. Available at SSRN: https://ssrn.com/abstract=2240128 or http://dx.doi.org/10.2139/ssrn.2240128

Barry Williams (Contact Author)

Department of Banking and Finance ( email )

Building H
Caulfield East, Victoria 3145
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Register to save articles to
your library

Register

Paper statistics

Downloads
111
Abstract Views
683
rank
246,811
PlumX Metrics