Publications:
Management Turnover, Regulatory Oversight, and Performance: Evidence from Banks
by Ajay A. Palvia
Abstract: This paper examines the role of the bank examination process in disciplining bank management. Examining data from more than 3,800 U.S. banks, I find that, after factoring in financial condition and various market and organizational factors, poor supervisory ratings and recent ratings downgrades lead to increased executive turnover. In addition, the results suggest that ratings-driven executive turnover is positively related to future performance, after controlling for current financial condition. The results are consistent with the explanation that the bank supervision process, by imposing greater manager discipline, improves the profitability of banking firms and thereby raises shareholder value.
Disclaimer
Any whole or partial reproduction of material in this paper should include the following citation: Ajay A. Palvia, "Management Turnover, Regulatory Oversight, and Performance: Evidence from Banks," Office of the Comptroller of the Currency, Economics Working Paper 2008-1, March 2008.
Availability
This Economics Working Paper is available for viewing in
Adobe's PDF format. The PDF viewer is available for
download free from Adobe in versions for different platforms.
The complete paper also is available in hard copy from the OCC's Communications Division. If you would like to receive a paper copy of an Economics Working Paper through the U.S. Postal Service:
- Write to the Communications Division, Mail Stop 2-3, Office of the Comptroller of the Currency, Washington, DC 20219, or
- Send an e-mail request to the Communications Division at publications@occ.treas.gov.
Be sure to identify the paper(s) you want and to include your complete mailing address, including ZIP code.
|