European deposit insurance scheme and bank board composition

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Abstract

This paper investigates whether bank corporate governance can play a role in the aggregate risk score assigned to individual banks by regulators. We exploit regulatory changes at the European level and a fixed-effects model to reduce endogeneity issues. We contribute to the existing literature on bank corporate governance by showing that board age significantly increases bank risk. This may indicate that boards formed by older members are more entrenched and can also be less dynamic. Board size and gender composition of the board are risk-neutral.

Keywords: European Deposit Insurance Scheme, Bank Boards, Bank Risk, Financial Stability

Authors’ individual contribution: Conceptualization – F.A. and V.C.; Methodology – F.A.; Formal Analysis – F.A.; Resources – V.C.; Validation – F.A. and V.C.; Writing – Original Draft – F.A. and V.C.; Writing – Review and Editing – F.A. and V.C.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G21, G38

Received: 19.05.2020
Accepted: 15.07.2020
Published online: 16.07.2020

How to cite this paper: Arnaboldi, F., & Capizzi, V. (2020). European deposit insurance scheme and bank board composition [Special issue]. Corporate Ownership & Control, 17(4), 246-256. https://doi.org/10.22495/cocv17i4siart3