Organizational Structure and Exposure to Crisis Among European Banks: Evidence from Rating Changes

22 Pages Posted: 18 Jun 2014

See all articles by Giovanni Ferri

Giovanni Ferri

LUMSA University

Panu Kalmi

Aalto University - Department of Economics

Eeva Kerola

AALTO University School of Business, Helsinki

Date Written: June 17, 2014

Abstract

The Great Crisis that started in 2007 deeply affected banks throughout Europe. Using the assessments of the two global agencies that publish ratings of the financial strength of individual banks, we study whether the crisis hit European banks differently depending on their organizational structure. We analyze the changes in the ratings during the crisis and how they are related to bank ownership. Our results lend support to the hypothesis that stakeholder banks, especially cooperative banks, were downgraded to a lesser degree than shareholder banks. However, the results differ somewhat across the rating agencies. We also discuss the sources of ratings disagreements in the paper. Our paper is among the first presenting statistically based evidence on the relative merits of different organizational structures during the recent financial and economic crisis.

Keywords: European banking; shareholder banks; cooperative banks; savings banks; performance; credit rating agencies

JEL Classification: G2; G3; L2; P1

Suggested Citation

Ferri, Giovanni and Kalmi, Panu and Kerola, Eeva, Organizational Structure and Exposure to Crisis Among European Banks: Evidence from Rating Changes (June 17, 2014). Journal of Entrepreneurial and Organizational Diversity, Special Issue on Cooperative Banks, Vol. 3, No. 1, 2014, 35-55. Available at SSRN: https://ssrn.com/abstract=2450060

Giovanni Ferri

LUMSA University ( email )

Via della Traspontina
Roma, Rome 00192
Italy

HOME PAGE: http://www.lumsa.it/giovanni-ferri

Panu Kalmi (Contact Author)

Aalto University - Department of Economics ( email )

PO Box 1210
FI-00101 Helsinki
Finland

Eeva Kerola

AALTO University School of Business, Helsinki ( email )

P.O. Box 21210
AALTO, FI-00076
Finland

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