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Bank liquidity creation and risk-taking: Does managerial ability matter?

Andreou, P.; Philip, D.; Robejsek, P.

Bank liquidity creation and risk-taking: Does managerial ability matter? Thumbnail


P. Robejsek


This study investigates the impact of managerial ability on banks' liquidity creation and risk-taking behavior. We find that higher ability managers create more liquidity and take more risk. During financial crisis times, however, higher ability bank managers reduce liquidity creation as a way to de-leverage their balance sheets. Our findings inform recent theoretical and empirical studies that investigate determinants of liquidity creation and risk by introducing managerial ability as a prominent antecedent of the banks' intermediation and risk-transforming service. Moreover, this study has policy-related implications, since managerial ability can be quantified as a key performance indicator for prudential supervision of banks and could help regulators to target intervention efforts more purposefully during crisis times.


Andreou, P., Philip, D., & Robejsek, P. (2016). Bank liquidity creation and risk-taking: Does managerial ability matter?. Journal of Business Finance and Accounting, 43(1-2), 226-259.

Journal Article Type Article
Acceptance Date Nov 5, 2015
Online Publication Date Mar 14, 2016
Publication Date Jan 1, 2016
Deposit Date Nov 9, 2015
Publicly Available Date Mar 14, 2018
Journal Journal of Business Finance and Accounting
Print ISSN 0306-686X
Electronic ISSN 1468-5957
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 43
Issue 1-2
Pages 226-259
Keywords Financial institutions, Managerial ability, Liquidity creation, Risk-taking, Financial crisis.
Public URL


Accepted Journal Article (674 Kb)

Copyright Statement
This is the accepted version of the following article: Andreou, P., Philip, D. and Robejsek, P. (2015). Bank Liquidity Creation and Risk-Taking: Does Managerial Ability Matter? Journal of Business Finance and Accounting. 43(1-2): 226–259, which has been published in final form at This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.

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