Governance and Bank Valuation
Which public policies and ownership structures enhance the governance of banks? The authors construct a new database on the ownership of banks internationally and then assess the ramifications of ownership, shareholder protection laws, and supervis...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/02/4044470/governance-bank-valuation http://hdl.handle.net/10986/14726 |
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okr-10986-147262021-04-23T14:03:20Z Governance and Bank Valuation Caprio, Gerard Laeven, Luc Levine, Ross BANKING CORPORATE GOVERNANCE SECURITIES LAW SUPERVISION REGULATION REGULATION OF FINANCIAL INSTITUTIONS BANKING SUPERVISION BANK HOLDING COMPANIES ADVERSE EFFECTS AGENCY PROBLEMS ASSET STRIPPING ASSETS AUDITORS BANK CAPITAL BANK HOLDING COMPANIES BANK HOLDING COMPANY BANK PERFORMANCE BANK REGULATION BANK RISK BANK SUPERVISION BANKING SECTOR BANKING SYSTEM BANKS BOOK VALUE CAPITAL ACCUMULATION CAPITAL REQUIREMENTS CAPITAL STANDARDS CENTRAL BANKS COMMERCIAL BANKS COMPETITIVENESS CORPORATE CONTROL CORPORATE FINANCE CORPORATE GOVERNANCE COST OF CAPITAL DEPOSIT INSURANCE DEPOSITORS DISCLOSURE DIVIDENDS EXCESSIVE RISK EXPROPRIATION EXTERNAL FINANCING FEDERAL RESERVE BANK OF NEW YORK FINANCIAL INSTITUTIONS FOREIGN SHAREHOLDERS GOVERNMENT REGULATION GROWTH RATE INSTITUTIONAL DEVELOPMENT INSURANCE POLICIES INVESTOR PROTECTION LARGE SHAREHOLDERS LAWS LEGAL PROTECTION LEGAL SYSTEMS LIQUIDITY MARKET VALUATION MARKET VALUE MUTUAL FUND ORGANIZATIONAL STRUCTURE OWNERSHIP STRUCTURE PORTFOLIO PREDICTIONS PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC POLICIES REGULATORY REGIMES SAVINGS SECURITIES SECURITIES MARKETS SHAREHOLDERS SHAREHOLDERS RIGHTS STATE OWNERSHIP STATEMENTS STOCK EXCHANGES SUPERVISORY AGENCIES WEALTH Which public policies and ownership structures enhance the governance of banks? The authors construct a new database on the ownership of banks internationally and then assess the ramifications of ownership, shareholder protection laws, and supervisory and regulatory policies on bank valuations. Except in a few countries with very strong shareholder protection laws, banks are not widely held, but rather families or the state tend to control banks. The authors find that: (i) Larger cash flow rights by the controlling owner boosts valuations; (ii) Stronger shareholder protection laws increase valuations; and (iii) Greater cash flow rights mitigate the adverse effects of weak shareholder protection laws on bank valuations. These results are consistent with the views that expropriation of minority shareholders is important internationally, that laws can restrain this expropriation, and concentrated cash flow rights represent an important mechanism for governing banks. Finally, the evidence does not support the view that empowering official supervisory and regulatory agencies will increase the market valuation of banks. 2013-08-01T15:56:22Z 2013-08-01T15:56:22Z 2004-02 http://documents.worldbank.org/curated/en/2004/02/4044470/governance-bank-valuation http://hdl.handle.net/10986/14726 English en_US Policy Research Working Paper;No.3202 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
BANKING CORPORATE GOVERNANCE SECURITIES LAW SUPERVISION REGULATION REGULATION OF FINANCIAL INSTITUTIONS BANKING SUPERVISION BANK HOLDING COMPANIES ADVERSE EFFECTS AGENCY PROBLEMS ASSET STRIPPING ASSETS AUDITORS BANK CAPITAL BANK HOLDING COMPANIES BANK HOLDING COMPANY BANK PERFORMANCE BANK REGULATION BANK RISK BANK SUPERVISION BANKING SECTOR BANKING SYSTEM BANKS BOOK VALUE CAPITAL ACCUMULATION CAPITAL REQUIREMENTS CAPITAL STANDARDS CENTRAL BANKS COMMERCIAL BANKS COMPETITIVENESS CORPORATE CONTROL CORPORATE FINANCE CORPORATE GOVERNANCE COST OF CAPITAL DEPOSIT INSURANCE DEPOSITORS DISCLOSURE DIVIDENDS EXCESSIVE RISK EXPROPRIATION EXTERNAL FINANCING FEDERAL RESERVE BANK OF NEW YORK FINANCIAL INSTITUTIONS FOREIGN SHAREHOLDERS GOVERNMENT REGULATION GROWTH RATE INSTITUTIONAL DEVELOPMENT INSURANCE POLICIES INVESTOR PROTECTION LARGE SHAREHOLDERS LAWS LEGAL PROTECTION LEGAL SYSTEMS LIQUIDITY MARKET VALUATION MARKET VALUE MUTUAL FUND ORGANIZATIONAL STRUCTURE OWNERSHIP STRUCTURE PORTFOLIO PREDICTIONS PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC POLICIES REGULATORY REGIMES SAVINGS SECURITIES SECURITIES MARKETS SHAREHOLDERS SHAREHOLDERS RIGHTS STATE OWNERSHIP STATEMENTS STOCK EXCHANGES SUPERVISORY AGENCIES WEALTH |
| spellingShingle |
BANKING CORPORATE GOVERNANCE SECURITIES LAW SUPERVISION REGULATION REGULATION OF FINANCIAL INSTITUTIONS BANKING SUPERVISION BANK HOLDING COMPANIES ADVERSE EFFECTS AGENCY PROBLEMS ASSET STRIPPING ASSETS AUDITORS BANK CAPITAL BANK HOLDING COMPANIES BANK HOLDING COMPANY BANK PERFORMANCE BANK REGULATION BANK RISK BANK SUPERVISION BANKING SECTOR BANKING SYSTEM BANKS BOOK VALUE CAPITAL ACCUMULATION CAPITAL REQUIREMENTS CAPITAL STANDARDS CENTRAL BANKS COMMERCIAL BANKS COMPETITIVENESS CORPORATE CONTROL CORPORATE FINANCE CORPORATE GOVERNANCE COST OF CAPITAL DEPOSIT INSURANCE DEPOSITORS DISCLOSURE DIVIDENDS EXCESSIVE RISK EXPROPRIATION EXTERNAL FINANCING FEDERAL RESERVE BANK OF NEW YORK FINANCIAL INSTITUTIONS FOREIGN SHAREHOLDERS GOVERNMENT REGULATION GROWTH RATE INSTITUTIONAL DEVELOPMENT INSURANCE POLICIES INVESTOR PROTECTION LARGE SHAREHOLDERS LAWS LEGAL PROTECTION LEGAL SYSTEMS LIQUIDITY MARKET VALUATION MARKET VALUE MUTUAL FUND ORGANIZATIONAL STRUCTURE OWNERSHIP STRUCTURE PORTFOLIO PREDICTIONS PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC POLICIES REGULATORY REGIMES SAVINGS SECURITIES SECURITIES MARKETS SHAREHOLDERS SHAREHOLDERS RIGHTS STATE OWNERSHIP STATEMENTS STOCK EXCHANGES SUPERVISORY AGENCIES WEALTH Caprio, Gerard Laeven, Luc Levine, Ross Governance and Bank Valuation |
| relation |
Policy Research Working Paper;No.3202 |
| description |
Which public policies and ownership
structures enhance the governance of banks? The authors
construct a new database on the ownership of banks
internationally and then assess the ramifications of
ownership, shareholder protection laws, and supervisory and
regulatory policies on bank valuations. Except in a few
countries with very strong shareholder protection laws,
banks are not widely held, but rather families or the state
tend to control banks. The authors find that: (i) Larger
cash flow rights by the controlling owner boosts valuations;
(ii) Stronger shareholder protection laws increase
valuations; and (iii) Greater cash flow rights mitigate the
adverse effects of weak shareholder protection laws on bank
valuations. These results are consistent with the views
that expropriation of minority shareholders is important
internationally, that laws can restrain this expropriation,
and concentrated cash flow rights represent an important
mechanism for governing banks. Finally, the evidence does
not support the view that empowering official supervisory
and regulatory agencies will increase the market valuation
of banks. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Caprio, Gerard Laeven, Luc Levine, Ross |
| author_facet |
Caprio, Gerard Laeven, Luc Levine, Ross |
| author_sort |
Caprio, Gerard |
| title |
Governance and Bank Valuation |
| title_short |
Governance and Bank Valuation |
| title_full |
Governance and Bank Valuation |
| title_fullStr |
Governance and Bank Valuation |
| title_full_unstemmed |
Governance and Bank Valuation |
| title_sort |
governance and bank valuation |
| publisher |
World Bank, Washington, D.C. |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2004/02/4044470/governance-bank-valuation http://hdl.handle.net/10986/14726 |
| _version_ |
1764430303390072832 |