A poor risk culture was one of the causes of the financial crisis. Surprisingly, there is no evidence of the link between risk culture and bank stability. Using a large sample of European banks from 2004 to 2017, our paper shows that a sound risk culture leads to better performance. Our research design is based on three steps. First, we developed a new Sound Risk Culture Indicator based on the Financial Stability Board (2014) risk culture framework. Second, we estimated this new metric by applying Quantitative Text Analysis. Third, we used an IV 2SLS panel data approach to establish a causal link between bank risk culture and profitability.

Bianchi, N., Carretta, A., Farina, V., Fiordelisi, F. (2021). Does espoused risk culture pay? Evidence from European banks. JOURNAL OF BANKING & FINANCE.

Does espoused risk culture pay? Evidence from European banks

Nicola Bianchi;Alessandro Carretta;Vincenzo Farina;
2021-01-01

Abstract

A poor risk culture was one of the causes of the financial crisis. Surprisingly, there is no evidence of the link between risk culture and bank stability. Using a large sample of European banks from 2004 to 2017, our paper shows that a sound risk culture leads to better performance. Our research design is based on three steps. First, we developed a new Sound Risk Culture Indicator based on the Financial Stability Board (2014) risk culture framework. Second, we estimated this new metric by applying Quantitative Text Analysis. Third, we used an IV 2SLS panel data approach to establish a causal link between bank risk culture and profitability.
2021
Pubblicato
Rilevanza internazionale
Articolo
Esperti anonimi
Settore SECS-P/11 - ECONOMIA DEGLI INTERMEDIARI FINANZIARI
English
Risk culture; Performance ;Banking; Text analysis; Stability
https://www.sciencedirect.com/science/article/pii/S0378426620300339
Bianchi, N., Carretta, A., Farina, V., Fiordelisi, F. (2021). Does espoused risk culture pay? Evidence from European banks. JOURNAL OF BANKING & FINANCE.
Bianchi, N; Carretta, A; Farina, V; Fiordelisi, F
Articolo su rivista
File in questo prodotto:
File Dimensione Formato  
1-s2.0-S0378426620300339-main.pdf

solo utenti autorizzati

Tipologia: Versione Editoriale (PDF)
Licenza: Copyright dell'editore
Dimensione 901.77 kB
Formato Adobe PDF
901.77 kB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2108/320854
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 14
  • ???jsp.display-item.citation.isi??? 13
social impact