The Importance of Board Risk Oversight in Times of Crisis
Dupire, Marion Haddad, Christian Slagmulder, Regine
Dupire, Marion
Haddad, Christian
Slagmulder, Regine
Citations
Altmetric:
Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2022-06
Journal
Journal of Financial Services Research
Book
Publication Volume
61
Publication Issue
3
Publication Begin page
319
Publication End page
365
Publication Number of pages
Collections
Abstract
This study investigates the relationship between board risk oversight practices at financial institutions in the EU and systemic risk during the sovereign debt crisis. More specifically, we examine whether European banks and insurance companies that had strong board-level risk oversight in place before the onset of the sovereign debt crisis fared better during the crisis. We construct a risk oversight index based on publicly available, hand-collected data, which captures the strength of the institutions’ board-level risk governance practices. We find that financial institutions with stronger board risk oversight prior to the crisis were less vulnerable to the sovereign debt crisis, after controlling for other factors. The results are consistent and economically relevant for SRISK, probability of default, and Delta-CoVaR, three measures of systemic risk that are commonly used in the context of financial institutions.
Research Projects
Organizational Units
Journal Issue
Keywords
3502 Banking, Finance and Investment, 35 Commerce, Management, Tourism and Services