Institutional Ownership and Tail Risk Comovement in Banks
成果类型：
Article; Early Access
署名作者：
De George, Emmanuel T.; Reiter, Nayana; Synn, Christina; Williams, Christopher Don
署名单位：
University of Miami; University of Toronto; American University; University of Michigan System; University of Michigan
刊物名称：
MANAGEMENT SCIENCE
ISSN/ISSBN：
0025-1909
DOI：
10.1287/mnsc.2023.02522
发表日期：
2025
关键词：
accounting
Financial institutions
banks
disclosure
institutional shareholders
摘要：
Recent regulatory discussions concentrate on the role institutional investors play in the financial sector. We investigate the determinants and consequences of institutional ownership (IO) in banks. Our findings suggest that institutional owners invest more in banks that have a lower proportion of consumer and real estate loans; are less opaque; have a lower level of insider control; are larger, older, and more capitalized; and have lower stock return volatility. In contrast, banks' funding characteristics, loan risk appetite, and connectedness with other banks do not seem to be relevant factors in institutional investors' decisions to hold a bank. We further investigate whether IO is related to tail risk comovement and changes in bank operations. We find robust evidence suggesting that IO is positively associated with a bank's future tail risk and that the association between IO and tail risk is significantly higher for banks than it is for nonfinancial firms. We also find that this relationship is stronger for banks during economic downturns. Correspondingly, we find that there is a greater reduction in lending growth and greater increases in opacity and risk taking during recessionary periods for banks with higher levels of IO. Our results suggest that institutions with low monitoring incentives in particular play a role in increasing tail risk comovement and in the deleterious real effects of IO. Lastly, we find evidence suggesting that disclosure may play a role in mitigating the relationship between IO and tail risk comovement.