Abstract
This article examines the evidences of moral hazard and the determinants of risk-taking among 500 banks in Central Europe, the Baltic, and Balkan region. We analyze moral hazard incentives and investigate which factors impact the risk profile of the banks in empirical relationships between shareholders, bank managers, regulatory restraints, and ownership structure. We find strong link between level of risk-taking and bank manager performance and efficiency, which supports the theoretical argumentation of the moral hazard. The capital requirements and regulatory concerns exhibit significant effect on the risk-taking behavior. A positive relation between government ownership and risk profile is observed in the dataset.
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Acknowledgments
The article is processed as an output of a research project. This project has received funding from the European Union’s Horizon 2020 Research and Innovation Staff Exchange program under the Marie Sklodowska-Curie grant agreement No. 681228. We also acknowledge support from the Czech Science Foundation (grant15-00036S). The views expressed in the paper are those of the authors and not necessarily those of our institutions.
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Janda, K., Kravtsov, O. (2018). Micro-level Evidences of Moral Hazard in the European Financial Institutions. In: Procházka, D. (eds) The Impact of Globalization on International Finance and Accounting. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-68762-9_10
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DOI: https://doi.org/10.1007/978-3-319-68762-9_10
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