Bank governance and risk-taking during times of crises: Evidence from Tunisian commercial banks

Mondher Kouki, Lamia Mabrouk, Nadia Sghaier, Monia Chikhaoui, Wiem Dridi

Article ID: 5395
Vol 8, Issue 12, 2024

VIEWS - 14 (Abstract) 4 (PDF)

Abstract


The objective of this paper is to assess the influence of various types of crises, including the Subprime, COVID-19, and political crises, on corporate governance attributes, regulations, and the association with bank risk. The consecutive occurrences of crises have significantly impacted the global economy, causing substantial disruptions across various facets of the international banking system. Our hypothesis posits that these crises not only influence governance characteristics and regulations but also impact their correlation with the risk and financial distress experienced by banks. Our study is conducted within the Tunisian context spanning from 2000 to 2021, utilizing a GMM regression on a dataset comprising 221 bank-year observations. Our findings indicate that crises have a discernible effect on the relationship between corporate governance and bank risk, as well as between regulation and bank risk. Our results are strong in a range of sensitivity checks, including the use of alternative proxies to measure the bank risks and corporate governance metrics.


Keywords


bank risk; corporate governance; various types of crises

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DOI: https://doi.org/10.24294/jipd.v8i12.5395

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