Title
Monitoring and governance of private banks
Document Type
Article
Publication Date
5-21-2008
Abstract
In this paper I examine regulation and corporate governance mechanisms at a sample of non-publicly traded state member banks in 2006. Using a simultaneous regression approach, results show that insider representation on the board has a positive influence on both director and executive compensation in commercial banks. Regulatory ratings, however, are only related to bank performance—not to board structure or compensation schemes. This may be attributed to less information asymmetry between managers and owners at private banks. Also, directors are rewarded for strong CAMELS ratings. The governance structure of private banks is not affected by regulatory ratings; however, the percent of insiders on the board influences actions of the board to a large extent.
Language
English
Recommended Citation
Cooper, Elizabeth W., "Monitoring and governance of private banks" (2008). Department of Finance. 4.
https://digitalcommons.lasalle.edu/finance/4
DOI
https://doi.org/10.1016/j.qref.2008.04.002
Comments
This article is the authors' final published version in The Quarterly Review of Economics and Finance, Volume 49, Issue 2, May 2009, Pages 253-264.
The published version is available at https://doi.org/10.1016/j.qref.2008.04.002. Copyright © The Board of Trustees of the University of Illinois