Through thick and thin: the role of bank corporate governance in risk taking after the great financial crisis. Lessons from distressed banks and precautionary recapitalisation in Italy prior to and under the BRRD.

Anno
2017
Proponente Marina Brogi - Professore Ordinario
Sottosettore ERC del proponente del progetto
Componenti gruppo di ricerca
Componente Categoria
Corrado Gatti Componenti il gruppo di ricerca / Participants in the research project
Ida Claudia Panetta Componenti il gruppo di ricerca / Participants in the research project
Valerio Pesic Componenti il gruppo di ricerca / Participants in the research project
Maria Teresa Bianchi Componenti il gruppo di ricerca / Participants in the research project
Componente Qualifica Struttura Categoria
Claudia Tomasetti Partner Bonelli Erede Altro personale Sapienza o esterni / Other personnel Sapienza or other institution
Riccardo Andriolo Dottore commercialista Athena Altro personale Sapienza o esterni / Other personnel Sapienza or other institution
Diana Capone Dirigente Banca d'Italia Altro personale Sapienza o esterni / Other personnel Sapienza or other institution
Federico Picco Dipendente CONSOB Altro personale Sapienza o esterni / Other personnel Sapienza or other institution
Abstract

'Alongside adequate capital and organization, the third factor of the stability of the banking system is the quality of corporate governance' (Draghi, 2008).
'The ultimate responsibility for the safety and soundness of a financial institution resides with its board. As such, supervisors are more focused today on the quality of an institution's risk governance framework, risk management, risk culture and the role that the board plays in ensuring they are appropriate and effective' (FSB, 2014).
'Governance is the first line of defence of a bank's soundness, whereas capital is the last one' (Angeloni, 2017).
The Research program intends to investigate bank corporate governance and risk taking after the great financial crisis, both in a 'business as usual' as well as in a distressed context using both quantitative and qualitative approaches. The former aimed at providing policy makers with a set of early warning indicators of risk (of malpractice, measured by related party transactions published, improper directors, measured by former administrative sanctions, unfit directors measured by an index which captures the professional backgrounds of directors and is based on their CVs). This will entail building a hand-collected data-base of sanctions and related party transactions and board member characteristics to identify their effects on bank performance and distress.
The qualitative approaches will investigate the actual management of crisis situations by the in-depth analysis of a set of case histories. This will be an entirely novel and very significant contribution, as the new regulatory framework has been only recently introduced in the EU, and Italy will be the first State to intervene with a precautionary recapitalization under the BRRD.
Previous literature investigating corporate governance of listed companies in Italy includes Bianchi and Bianco, 2006, Minichilli, Brogi, Calabrò, 2016 and specifically on Italian listed banks Szego, De Vincenzo, Marano, 2008.

ERC
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