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Governance mechanisms in Spanish banks.
Does ownership matter?
Rafel留学生论文 Cresp
ı a, Miguel A. Garc
ıa-Cestona b,*, Vicente Salas c
a Universitat de les Illes Balears, Palma de Mallorca, Spain
b Universitat Autonoma de Barcelona (UAB), Bellaterra (Barcelona), Spain
c Universidad de Zaragoza, Zaragoza, Spain
Received 18 November 2002; accepted 9 September 2003
Available online 9 January 2004
Abstract
This paper examines the governance of Spanish banks regarding two main issues. First,does poor economic performance activate governance interventions that favor the removalof executive directors and the merger of non-performing banks? And, second, does the relationship
between governance intervention and economic performance vary with the ownershiform of the bank? We find a negative relationship between performance and governance interventionfor banks, but the results change for each form of ownership and each type of intervention.Internal-control mechanisms work for Independent Commercial banks, but Savings
banks show weaker internal mechanisms of control and the onlysignificant relationship betweenperformance and governance intervention that appears is for mergers. The Spanish Savingsbanks, with a peculiar form of ownership that, in fact, implies a lack of ownership, givevoice to several stakeholder groups with no clear allocation of property rights. Nevertheless,their economic performance is not generally affected. Product-market competition compensatesfor those weaker internal governance mechanisms, and non-performing banks are notfully protected from disappearing.

Keywords: Corporate governance; Commercial and savings banks; Executive turnover; Mergers and acquisitions

1. Introduction
This paper presents empirical evidence on the effective use of governance mechanismsfor disciplining non-performing managers and directors of Spanish Commercialbanks (shareholder-oriented banks) and Savings banks (non-profit commercialbanks). The paper provides evidence on how, in both types of institutions, lower economicperformance increases, in an economically significant way, the likelihood of
directors’ turnover and/or the likelihood that the bank will merge or will be acquired.The topic of corporate governance is receiving heightened attention. 1 Althoughmuch of what is said also applies to banks, it is true that the banking firm has significantdifferences with respect to corporations in other economic sectors, and thisjustifies a special interest in its governance problems (Prowse, 1997; Adams and
Mehran, 2003). For example, there is a clear conflict inside the banks between theinterests of the shareholders and the interests of the depositors, with the former beingwilling to take high-risk projects that increase share value at the expense of the value
of the deposits. Small deposits are insured and banks are regulated, to avoid crisis ofconfidence and bank runs, although it increases the moral hazard problem, as wasseen in the Savings and Loan crisis in the US. Whether regulation substitutes or complementstraditional governance mechanisms and controls is a subject of debate, but
it is generally agreed that the external controls coming from takeovers and productmarketcompetition turn out to be weaker in banks than in other firms (Prowse,1997). Good governance relies more on the workings of internal mechanisms, suchas the supervision and the control exercised by the b本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。