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- W1965432529 abstract "Using a sample of 175 publicly traded bank holding companies (BHCs), we find that managerial incentives and external monitoring affect the decision to use derivatives in the banking industry. Managers with incentives that are more closely aligned with the interests of shareholders, as reflected in a high percentage of CEO shareholdings, are less likely to use derivatives when insider holdings exceed 10%. Similarly, when outside directors own substantial equity, the firm is less likely to use derivatives. These results suggest that managers with large equity stakes take advantage of the risk-shifting opportunities of deposit insurance by not hedging. For BHCs with insider holdings below 10%, however, monitoring by outside directors is associated with a greater likelihood of derivative usage. This suggests that monitoring by outside directors may lead to more risk-averse behavior on the part of managers with small equity stakes." @default.
- W1965432529 created "2016-06-24" @default.
- W1965432529 creator A5039042419 @default.
- W1965432529 creator A5063911430 @default.
- W1965432529 date "1999-09-01" @default.
- W1965432529 modified "2023-09-25" @default.
- W1965432529 title "Derivative activities and managerial incentives in the banking industry" @default.
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- W1965432529 doi "https://doi.org/10.1016/s0929-1199(99)00005-x" @default.
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