Please use this identifier to cite or link to this item:
http://hdl.handle.net/10397/94412
Title: | Cross-country evidence on the relationship between societal trust and risk-taking by banks | Authors: | Kanagaretnam, K Lobo, GJ Wang, C Whalen, DJ |
Issue Date: | Feb-2019 | Source: | Journal of financial and quantitative analysis , Feb. 2019, v. 54, no. 1, p. 275-301 | Abstract: | We study the relationship between societal trust and risk-taking in the banking industry. Prior literature has found that societal trust is positively related to both financial reporting conservatism and financial reporting transparency, which reduce bank managers' ability to take excessive risk. Additionally, bank managers in high-trust countries are more likely to exhibit higher pro-social behavior and, therefore, less likely to take excessive risk for personal benefit. Consistent with these arguments, we document that banks in countries with higher societal trust exhibit lower risk-taking and that these banks also experienced less financial trouble and fewer failures during the 2007-2009 financial crisis. | Journal: | Journal of financial and quantitative analysis | ISSN: | 0022-1090 | EISSN: | 1756-6916 | DOI: | 10.1017/S0022109018000455 | Rights: | Copyright © Michael G. Foster School of Business, University of Washington 2018 |
Appears in Collections: | Journal/Magazine Article |
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Kanagaretnam_Cross_Country_Evidence.pdf | 254.05 kB | Adobe PDF | View/Open |
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