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Journal of Accounting and Economics Vol. 65 No. 1 2018

Bank CEO materialism: Risk controls, culture and tail risk

Robert M. Bushman1; Robert H. Davidson2; Aiyesha Dey3; Abbie Smith4

1 University of North Carolina at Chapel Hill · 2 Georgetown University · 3 University of Minnesota · 4 University of Chicago

Abstract

We investigate how the prevalence of materialistic bank CEOs has evolved over time, and how risk management policies, non-CEO executives’ behavior and tail risk vary with CEO materialism. We document that the proportion of banks run by materialistic CEOs increased significantly from 1994 to 2004, that the strength of risk management functions is significantly lower for banks with materialistic CEOs, and that non-CEO executives in banks with materialistic CEOs insider trade more aggressively around government intervention during the financial crisis. Finally, we find that banks with materialistic CEOs have significantly more downside tail risk relative to banks with non-materialistic CEOs.

DOI
10.1016/j.jacceco.2017.11.014
Volume
65
Issue
1
Pages
191-220
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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