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The Impact Of Regulation And Governance On The Risk Profile Of Banks, Giovanna M. Carrillo
The Impact Of Regulation And Governance On The Risk Profile Of Banks, Giovanna M. Carrillo
ETD Archive
The impact of regulation and corporate governance on banks' risk profiles has gained greater importance with the passage of new legislations starting late 1990s and the recent global turmoil in the financial services industry. The extant literature indicates that the effects of corporate governance mechanisms differ between financial and non-financial firms. Yet, the effects on risk-taking have been less conclusive for financial firms primarily because of changing regulations impacting incentives and risk-taking patterns of banks. While the objective of regulation in the banking industry is to preserve the stability of the financial sector and the economic system, corporate governance mechanisms …
Default Risk In Equity Returns; An Industrial And Cross-Industrial Study, Yi Wang
Default Risk In Equity Returns; An Industrial And Cross-Industrial Study, Yi Wang
ETD Archive
The relationship between default risk and equity returns is investigated in this study from an industrial and economic cycle decomposition point of view. The portfolio approach and Fama-MacBeth regression are used in the analysis. This dissertation provides evidence that investors charged a premium for stocks with both lower and higher credit risks. However, the specific relationship is different across industries and economic cycles. This study also notices two unique patterns of the banking industry when it comes to default risk. First, higher default risks are more likely to be compensated by higher returns. Second, as compared to other industries, the …