Why do Bank Boards have Risk Committees? / René M. Stulz, James G. Tompkins, Rohan Williamson, Zhongxia (Shelly) Ye.

Format:

Book

Author/Creator:

Stulz, René M.

Contributor:

National Bureau of Economic Research.

Tompkins, James G.

Williamson, Rohan.

Ye, Zhongxia (Shelly).

Series:

Working Paper Series (National Bureau of Economic Research) no. w29106.

NBER working paper series no. w29106

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

We develop a theory of bank board risk committees. With this theory, such committees are valuable even though there is no expectation that bank risk is lower if the bank has a well-functioning risk committee. As predicted by our theory (1) many large and complex banks voluntarily chose to have a risk committee before the Dodd-Frank Act forced bank holding companies with assets in excess of $10 billion to have a board risk committee, and (2) establishing a board risk committee does not reduce a bank's risk on average. Using unique interview data, we show that the work of risk committees is consistent with our theory in part.

Notes:

Print version record

July 2021.