Cover IMF Working Papers
Who Disciplines Bank Managers?
Author:
Andrea M. Maechlernull

Search for other papers by Andrea M. Maechler in
Current site
Google ScholarClose
,
Mr. Klaus Schaeck
Search for other papers by Mr. Klaus Schaeck in
Current site
Google ScholarClose
,
Mr. Martin Cihak
Search for other papers by Mr. Martin Cihak in
Current site
Google ScholarClose
https://orcid.org/0000-0002-3571-9707
, and
Stéphanie Marie Stolz
Search for other papers by Stéphanie Marie Stolz in
Current site
Google ScholarClose
Series:
IMF Working Papers
Volume/Issue:
Volume 2009: Issue 272
Language:
English
Publication Date:
01 Dec 2009
DOI:
https://doi.org/10.5089/9781451874174.001
ISBN:
9781451874174
ISSN:
1018-5941
Pages:
45
Keywords:
WP; bank risk; turnover bank; bank executive; risk return trade-off
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (814.1 KB) Download Epub
We bring to bear a hand-collected dataset of executive turnovers in U.S. banks to test the efficacy of market discipline in a 'laboratory setting' by analyzing banks that are less likely to be subject to government support. Specifically, we focus on a new face of market discipline: stakeholders' ability to fire an executive. Using conditional logit regressions to examine the roles of debtholders, shareholders, and regulators in removing executives, we present novel evidence that executives are more likely to be dismissed if their bank is risky, incurs losses, cuts dividends, has a high charter value, and holds high levels of subordinated debt. We only find limited evidence that forced turnovers improve bank performance.
  • Collapse
  • Expand
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2009: Issue 272