#2208. Board financial expertise and the capital decisions of US banks

September 2026publication date
Proposal available till 30-05-2025
4 total number of authors per manuscript6510 $

The title of the journal is available only for the authors who have already paid for
Journal’s subject area:
Finance;
Economics and Econometrics;
Business and International Management;
Places in the authors’ list:
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Contract №2208.1 Contract №2208.2 Contract №2208.3 Contract №2208.4
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2 place - free (for sale)
3 place - free (for sale)
4 place - free (for sale)

Abstract:
We examine whether increasing financial expertise among independent directors facilitates bank capital decisions that promote financial stability. We find banks with more financial expert independent directors opt for higher target capital ratios and adjust faster their capital structure when they are below the target. We provide evidence suggesting that our results are driven by the skill-set of these directors that lead to a better understanding of bank risks and access to external recapitalization choices. Our findings are further amplified by an increase in the exposure to losses of financial expert directors and by exogenous increases in regulatory scrutiny.
Keywords:
Bank boards; Bank capital; Financial expert independent directors; Regulatory scrutiny

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