RUHR ECONOMIC PAPERS Board Accountability and Risk Taking in Banking
نویسندگان
چکیده
The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors' own opinions and do not necessarily refl ect those of the editors. Die Deutsche Bibliothek verzeichnet diese Publikation in der deutschen National-bibliografi e; detaillierte bibliografi sche Daten sind im Internet über: Abstract In this paper, a law reform is evaluated that aimed at improving the corporate governance of German savings banks by tightening accountability and legal liability of outside directors. The causal eff ect of this reform on bank risk is identifi ed by diff erence-in-diff erences and triple diff erences strategies. The estimation results show that savings banks subject to the reform increased capital and liquidity ratios. Hence, they have become less vulnerable to unexpected losses and liquidity shocks. This indicates that the low occurrence of outside director litigation refl ects incentive eff ects of current liability regimes.
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