Title: Corporate governance and systemic risk of Tunisian banks

Authors: Aymen Mselmi; Boutheina Regaieg

Addresses: Faculty of Economics and Management Tunis-el Manar, Department of Finance, University of Tunis el MANAR (UTM), B.P 248, El Manar II, 2092 Tunis, Tunisia ' Faculty of Law, Economics and Management, Department of Finance, Jendouba, University of Jendouba (UJ), Avenue U.M.A, 8189 Jendouba, Tunisia

Abstract: This paper studies the relationship between systemic risk measures and internal governance mechanisms of banking institutions and managers' entrenchment level. Our study examines a sample of 11 Tunisian listed banks over the 2006 to 2013 period. The aim is to determine systemic banks, the main governance internal mechanisms and managers' entrenchment level that contributed to attenuating or amplifying individual and overall systemic risk. The empirical results indicate that the internal governance mechanisms of banking institutions are positively associated with the long run marginal expected shortfall (LRMES), and that the presence of a risk management committee has no effect on the level of systemic risk incurred by banks. However, the regression on the LRMES and the firm's percentage of financial sector shortfall reveals that the respect of the norms of governance of the banking institutions leads to the minimisation of the individual contribution of the banks to the overall systemic risk of the Tunisian banking sector.

Keywords: corporate governance; entrenchment; financial performance; systemic risk.

DOI: 10.1504/IJCG.2018.090611

International Journal of Corporate Governance, 2018 Vol.9 No.1, pp.23 - 51

Received: 16 Nov 2016
Accepted: 11 Nov 2017
Published online: 23 Mar 2018 *

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