Financial misconduct and bank risk-taking: Evidence from US banks

Thornton, John, Altunbaş, Yener and Uymaz, Yurtsev (2025) Financial misconduct and bank risk-taking: Evidence from US banks. Journal of Banking and Finance. ISSN 0378-4266

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Abstract

We test for a link between bank risk-taking and regulatory enforcements against US banks for financial misconduct. Misconduct-related enforcements are associated with increased bank risk-taking on several measures of risk, and there is some evidence that the impact of enforcements on risk-taking is accentuated in the presence of powerful CEOs and a higher proportion of institutional investor ownership and mitigated when executive boards are larger, older, more independent, more gender diverse, busier, and where independent directors are relatively inexperienced. The results are robust to alternative measures of bank risk-taking, and alternative estimation techniques, including controlling for endogeneity bias.

Item Type:	Article
Uncontrolled Keywords:	bank risk-taking,financial misconduct,ceo power,executive boards,institutional investors
Faculty \ School:	Faculty of Social Sciences > Norwich Business School
UEA Research Groups:	Faculty of Social Sciences > Research Groups > Finance Group
Depositing User:	LivePure Connector
Date Deposited:	20 Mar 2025 15:30
Last Modified:	28 Mar 2025 13:15
URI:	https://ueaeprints.uea.ac.uk/id/eprint/98855
DOI:	10.1016/j.jbankfin.2025.107433

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