This is a past event
The seminar will be held via Teams on October 30th from 3pm - 4:15pm.
Join Dr Kwabena Aboah Addo, a Lecturer of Finance and Finance Education at the Utrecht University School of Economics.
Abstract:
We examine whether overconfident bank CEOs mitigate or amplify risk amid increasing Economic Policy Uncertainty (EPU). Our findings indicate the latter, with banks led by overconfident CEOs then assuming almost 2% more risk on average than other banks. We also find that this effect does not depend on the CEO’s gender or the political inclination of the state where the bank is headquartered. Overconfident CEOs contribute to high loan impairments during high EPU periods through excessive credit extension and under-provision of loan reserves, propagating a cycle of risky credit extension, which enhances overall bank performance, however. Investors, board members, and regulators should therefore be mindful of the systemic implications of their policies.
- Speaker
- Dr Kwabena Aboah Addo
- Hosted by
- University of Aberdeen
- Contact
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No booking required.