CEO overconfidence and financial crisis: Evidence from bank lending and leverage

• 成果类型: Article
• 署名作者: Ho, Po-Hsin; Huang, Chia-Wei; Lin, Chih-Yung; Yen, Ju-Fang
• 署名单位: National Taipei University; Yuan Ze University; Yuan Ze University; National Taipei University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2015.04.007
• 发表日期: 2016
• 页码: 194-209
• 关键词: ceo overconfidence; Financial crisis; Bank lending; Bank leverage; Risk culture

摘要

Over a period that includes the 1998 Russian crisis and 2007-2009 financial crisis, banks with overconfident chief executive officers (CEOs) were more likely to weaken lending standards and increase leverage than other banks in advance of a crisis, making them more vulnerable to the shock of the crisis. During crisis years, they generally experienced more increases in loan defaults, greater drops in operating and stock return performance, greater increases in expected default probability, and higher likelihood of CEO turnover or failure than other banks. CEO overconfidence thus can explain the cross-sectional heterogeneity in risk-taking behavior among banks. (C) 2016 Elsevier B.V. All rights reserved.