Ownership structure and risk at Colombian banks

Abstract

The separation between ownership and the control of capital in banks generates differences in thepreferences for risk among shareholders and the manager. These differences could imply a corporate governance problem in banks with a dispersed ownership, since owners fail to exert control in the allocation of capital. In this paper we examine the relationship between the ownership structure and risk for Colombian banks. Our results suggest that a high ownership concentration leads to higher levels of risk.corporate governance and banking risk