Do Professional Norms in the Banking Industry Favor Risk-taking?

Alain Cohn, Ernst Fehr and Michel Maréchal

No 6398, CESifo Working Paper Series from CESifo

Abstract: In recent years, the banking industry has witnessed several cases of excessive risk-taking that frequently have been attributed to problematic professional norms. We conduct experiments with employees from several banks in which we manipulate the saliency of their professional identity and subsequently measure their risk aversion in a real stakes investment task. If bank employees are exposed to professional norms that favor risk-taking, they should become more willing to take risks when their professional identity is salient. We find, however, that subjects take significantly less risk, challenging the view that the professional norms generally increase bank employees’ willingness to take risks.

Keywords: risk culture; banking industry; experiment (search for similar items in EconPapers)
JEL-codes: C93 G02 M14 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-ban, nep-cbe and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp6398.pdf (application/pdf)

Related works:
Journal Article: Do Professional Norms in the Banking Industry Favor Risk-taking? (2017)
Working Paper: Do professional norms in the banking industry favor risk-taking? (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6398

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().