Does Public–Private Status Affect Bank Risk Taking? Worldwide Evidence

Journal of International Financial Markets, Institutions & Money, Forthcoming

40 Pages Posted: 8 Jan 2018

See all articles by Anis Samet

Anis Samet

American University of Sharjah - School of Business and Management

Narjess Boubakri

American University of Sharjah - School of Business and Management; HEC Montreal - Department of Finance

Sabri Boubaker

University Paris-Est Créteil (UPEC) - Institut de Recherche en Gestion

Date Written: January 7, 2018

Abstract

In this paper, we examine risk taking by publicly traded and privately owned banks in an institutionally diversified international sample of countries. Using the Z–score as our primary risk proxy, we find that publicly traded banks engage in less risky activities than their privately owned peers. We further investigate whether listing status (i.e., public or private) impacts bank risk taking before and after the recent financial crisis and across different institutional environments. We find that public banks are likely to exhibit less risk taking than their private counterparts in countries with weak institutions. Further, we find that publicly traded banks are engaging in less risk-taking activities compared to private banks in the pre-crisis and post-crisis alike, but more in the post-crisis, across all countries.

Keywords: Private Banks, Publicly Traded Banks, Risk Taking, Financial Crisis

JEL Classification: G21, G28, G38

Suggested Citation

Samet, Anis and Boubakri, Narjess and Boubaker, Sabri, Does Public–Private Status Affect Bank Risk Taking? Worldwide Evidence (January 7, 2018). Journal of International Financial Markets, Institutions & Money, Forthcoming . Available at SSRN: https://ssrn.com/abstract=3097828

Anis Samet (Contact Author)

American University of Sharjah - School of Business and Management ( email )

P.O. Box 26666
Sharjah
United Arab Emirates

Narjess Boubakri

American University of Sharjah - School of Business and Management ( email )

P.O. Box 26666
Sharjah
United Arab Emirates

HOME PAGE: http://www.aus.edu

HEC Montreal - Department of Finance ( email )

3000 Chemin de la Cote-Sainte-Catherine
Montreal, Quebec H3T 2A7
Canada

Sabri Boubaker

University Paris-Est Créteil (UPEC) - Institut de Recherche en Gestion ( email )

61 Avenue du General de Gaulle
94010 Creteil
France

HOME PAGE: http://www.irg.u-pec.fr/enseignant.php?num=58

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