رفتار ریسک پذیر و مالکیت در صنعت بانکداری: شواهد اسپانیایی

This paper analyses the determinants of risk-taking in Spanish financial intermediaries, with special emphasis on the ownership structure and size of the different entities. On the one hand, the specific legal configuration of Spanish Savings banks may lead them to differ from Commercial banks in their risk behaviour. In particular, they may invest in riskier projects. Nevertheless, other theories indicate that greater stockholder control in Commercial banks may induce them towards greater risk-taking in certain situations. In this paper we test these hypotheses with a dynamic panel data model (1993–2000) for Spanish Commercial banks and Savings banks. We analyse whether differences in risk behaviour are related to different ownership structures or to other factors such as the size of the entity.

This paper presents empirical evidence on the differences in risk-taking behaviour between two financial intermediaries that compete for loans and deposits in the Spanish financial market: Spanish Commercial banks and Spanish Savings banks (hereinafter SCBs and SSBs, respectively). The former are privately owned banks that are shareholder-oriented corporations with a concentrated ownership structure. They are firms under strong shareholder control. The Spanish Savings banks have a legal status akin to commercial non-profit organisations, since profits must be either retained or distributed in cultural and social community programs. In addition, the control of SSBs is shared among multiple interest groups: local and regional governments, employees, depositors and their founding entities. In this sense, their ownership structure comes close to the shared ownership model (García-Cestona & Surroca, 2005; Salas & Saurina, 2002). The singular legal form of Spanish savings banks makes the Spanish case special and different from the rest of the Western countries. In the USA, before they were mostly converted into joint-stock companies beginning in the decade of the 1980s, there were savings and loans that compulsorily had a mutual structure in which the depositors were in turn owners of the entity, together with others that presented the typical form of a joint-stock company. Likewise, in Europe, banks organised as joint-stock companies coexist with savings banks organised in a different way, depending on the national legislation of each country. Thus there are savings banks set up as joint-stock companies or private entities (Ireland, United Kingdom, Italy, Sweden, Belgium, Finland, Holland and Denmark), as mutual institutions (France), as public entities (Portugal, Switzerland, Austria, Germany, Greece and Luxemburg), or as private foundations (Spain and Norway). In the Spanish case, unlike mutual savings institutions, the members of the governing bodies include not only depositors, but also employees and public administrations. This presence of public authorities on their governing bodies will affect decision-making. For example, Spanish regional governments may have incentives to control the Savings banks in their regions to enhance the sustainability of certain adjustment policies. The influence of these regional governments may weigh too heavily on certain commercial decisions taken by Savings banks, and could lead to excessive risk-taking. Hence, the actual objective function of the savings banks is difficult to ascertain, although anecdotal evidence indicates that managers and workers are possibly the most powerful interest group of the organisation. In this context, the IMF in its 1999 report and the OECD in its 2000 report recommended examining a change in legal form, in an attempt to approach a joint-stock structure. The studies carried out indicate that SSBs achieve profitability levels similar to those of SCBs. Also, SSBs have gained market share in retail banking during the period under study (Hasan & Lozano, 2002; Salas & Saurina, 2002). However, the differences in behaviour in the face of risk has barely been analysed for this type of entity.2 The first objective of this article is to provide new evidence for the current debate. Our aim is to analyse if the different organisational form of the two Spanish financial entities – savings banks and banks – is reflected in different risk-taking behaviour. We find the most relevant evidence for this issue in the comparison of mutual institutions with the banks in the United States. In general, these authors conclude that banks have more incentives to take risks (Cordell, MacDonald, & Wohar, 1993; Esty, 1997; Karels & McClatchey, 1999). However, this evidence is not directly transferable to the Spanish case. The Spanish savings banks are very different from mutual savings. As we mentioned above, the SSB range of objectives serves a variety of sometimes-conflicting interests among different stakeholders. In addition, SSBs are immune to market corporate control with the exception of friendly takeovers or mergers by other saving banks. The dispersed ownership structure and the lack of corporate control of SSBs would appear to give managers freedom of action, which induces Savings banks to undertake more risk. In order to test our hypothesis, we use two different proxies to measure insolvency risk for each type of institution. The first is the accounting model of bank risk proposed by Hannan and Hanweck (1988) and Boyd, Graham, & Hewitt (1993). Second, we define a new measure in the VAR philosophy: the Solvency margin. For performing the econometric estimation of our empirical model, we use the most advanced techniques for panel data, thus ensuring that we avoid estimation bias and specification problems. This paper also analyses how risk-taking behaviour is affected by internal control mechanisms in the governance of financial institutions, such as changes in governing bodies, shareholder concentration in the case of SCBs, or public control in the case of SSBs. The dissimilarities between Savings banks and Commercial banks could result in a different impact of control mechanisms on risk patterns. Finally, the paper focuses on the size of the entities as a new source of different patterns in bank risk-taking. Size may be a double-edged sword for analysts: bigger banks may be better diversified, meaning less concern about the idiosyncratic risks at each bank, but greater size also means that analysts must consider managers’ ability to cope with more complex, less focused operations.3 In this paper, we analyse whether differences in risk behaviour between Commercial banks and Savings banks are due more to size differences than to differences in their organisational form. The remainder of the paper is organised as follows. Section 2 explains the theoretical framework. Section 3 describes the risk-taking model. Section 4 presents the data sample together with a preliminary descriptive analysis. Section 5 reports the results of the estimation and the tests of the hypotheses. Section 6 contains the main conclusions.

This paper examines risk behaviour in Spanish Commercial banks and Spanish Savings banks, which share the same market but show important differences related to their legal configuration and ownership structure. Additionally, SSB singularities related to legal status and the presence of different stakeholders in their governing bodies make the Spanish case special and different from the rest of the Western countries. We analyse jointly the moral hazard problem and the owner–manager agency conflict by using two different proxies to measure insolvency risk. This allows us to test the robustness of our results. Our findings reveal major differences in the patterns and determinants of risk-taking behaviour, linked to both legal configuration and size. In general, we find Spanish Commercial banks more risk-inclined than Spanish Savings banks. This supports the moral hazard hypothesis described in the literature in the sense that, when able to rely on deposit insurance, the owners’ incentive to take risk increases, and this effect is not as great in SSBs with their more diffuse ownership structure. We also find that size is relevant to explaining risk-taking with both proxies. In general, the small size institutions appear to assume lower risks. When size and ownership interact in our model, Spanish Commercial banks of medium size seem to be the riskier entities. We find almost no differences related to size in the case of SSBs when we analyse SCBs and SSBs separately. In the same way, we find that the effect on risk-taking of the profitability of the bank, the kind of business, or turnover in the governing bodies also differs with ownership and size. Focusing on the internal control mechanisms, we find that they appear to work properly when we analyse the Z-score proxy of risk. Thus, turnover in governing bodies in Savings banks and Commercial banks is followed by a reduction of risk in the following period. However, it seems to cause lower solvency margins. In this paper, we have found that the degree of shareholder concentration in Commercial banks has a negative impact on the level of risk-taking. We expect that higher shareholder concentration will be linked to stricter shareholder control over managers. In this sense, shareholders of the SCBs in our sample are apparently reluctant to take on excessive risk, even when protected by deposit insurance. In the case of Saving banks, we do not find that the control of the bank by public administrations causes any effect on risk-taking. Finally, to conclude, our results point to differences in risk behaviour between Spanish Commercial and Saving banks, with the latter being less risk-inclined and this important question should be considered in the debate on the conversion of SSBs into shareholder-oriented institutions.