Accounting and Finance Seminars: Professor Jens Hagendorff

3 February 2016, 4.00 PM - 3 February 2016, 5.30 PM

Professor Jens Hagendorff (Cardiff Business School)

G.15, 15-19 Tyndalls Park Road

The Wolves of Wall Street: Manager Attributes and Bank Business Policies

Abstract

We investigate the role of unobservable executive-specific attributes (or ‘styles’) in affecting bank business policies. We decompose the variation in bank polices and document that top managers exert significant idiosyncratic influence over key bank policy choices. Bank manager styles are detectable in bank polices after controlling for time-variant and time-invariant manager attributes. Further, manager styles are important in explaining bank risk. Styles that favored holdings of mortgage-backed securities and larger funding gaps performed worse during the financial crisis of 2007-2009. Finally, manager styles affect appointment decisions and career progression in the market for managers.

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