publication . Book . Article . 2014

Credit Booms and Busts in Emerging Markets: The Role of Bank Governance and Risk Management

Alin Marius Andries; Martin Brown;
Open Access English
  • Published: 01 Jan 2014
  • Country: Switzerland
Abstract
This paper investigates to what extent risk management and corporate governance mitigate the involvement of banks in credit boom and bust cycles. Using a unique, hand-collected dataset on 156 banks from Central and Eastern Europe during 2005-2012, we assess whether banks with stronger risk management and corporate governance display more moderate credit growth in the pre-crisis credit boom as well as a smaller credit contraction and fewer credit losses in the crisis period. With respect to bank governance we document that a higher share of financial experts on the supervisory board is associated with more rapid credit growth in the pre-crisis period and a larger...
Subjects
free text keywords: business studies
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