Bank shareholding structure, risk and efficiency.

Summary The objective of this thesis is to analyze the role of shareholding structure in explaining risk taking and bank performance.It is also to study the factors that may modify the relationship between shareholding structure and bank risk. In chapter 1, we theoretically and empirically analyze the studies on the implication of the shareholder structure of banks in terms of risk and performance. In Chapter 2, we test the impact of shareholding structure on the risk and profitability of European banks. We show that an increase in the shareholding of families or banks is associated with a decrease in asset risk and default risk. We also show that institutional investors and non-financial companies impose riskier strategies on banks where they hold high shares. For listed banks, changes in ownership structure do not affect their risk-taking behavior. Market forces thus appear to align the risk-taking behavior of listed banks. In chapter 3, we study the impact of changes in shareholding structure on the efficiency of Asian banks after the 1997 crisis. Our results show that state-owned banks improved their cost efficiency even if this was not accompanied by improved profit efficiency. In contrast, we find no difference in efficiency among listed banks regardless of the shareholder class considered. Our results imply that regulators should take shareholder structure into account when designing regulatory policies, especially for listed banks. Furthermore, actions to differentiate the supervisory process for listed and unlisted banks are important for a more robust banking system.