Mónica López-Puertas Lamy is a researcher at the Unicredit Research Department and at the Department of Management at the University of Bologna. Previously, she held a Post-Doctoral position at the Department of Business Administration at Carlos III University (Madrid). She holds a Ph. D. in Business Economics, a MSc. in Economics, Management and Organizations from the Autonomous University of Barcelona (Spain), a P.G.Cert. in Quantitative Economics from the European University Institute (EUI) in Florence and a M.Sc. in Financial Audit and Higher Accountancy from the University of Malaga.
Her main research interests lie in the area of retail banking, corporate governance, financial stability and Corporate Finance.
Is bank risk-taking independent of the entity’s organizational form, and of the organizational form of its competitors? And is the influence of regulation and competition on bank risk-taking contingent on the organizational form? This study addresses these issues. Using a country-level panel dataset for the period 1993-2007, we show that savings banks and cooperative banks (stakeholder banks) are more stable than commercial banks, and the stability of commercial banks decrease in financial systems with a high presence of cooperatives and savings banks. We also show that the effect of competition and bank regulation (in terms of capital regulations, deposit insurance, and activity restrictions) on bank stability is contingent upon the bank ownership type. Specifically, we find that a) the effect of competition on stability is significantly more negative for commercial banks compared to stakeholder banks, as well as for any bank operating in systems with a higher proportion of stakeholder banks. b) Stringent capital regulatory measures decrease the stability of commercial banks, but have no effect upon the stability of stakeholder banks. In addition, we show that capital requirements increase bank stability in economies with a high proportion of stakeholder banks. c) The effect of activity restrictions on bank stability is negative for stakeholder banks, but positive for commercial banks. Consequently, we also find that the negative effect of activity restrictions on bank stability increases with the proportion of stakeholder banks in an economy. Finally, we show that deposit insurance has a negative impact on bank stability, and that this effect is strongest for commercial banks.
Overall, our findings suggest that it is important to consider the bank ownership structure when analyzing bank stability. This result may have important implications for academics and policy makers, as it indicates that ignoring bank ownership structure can lead to erroneous conclusions about the effects of competition and of banking regulations on bank stability.