Insufficient supervisory board competence as a risk factor for banks - new research by Harald Hau
The Credit Suisse crisis illustrates how poor governance can lead a large bank into a crisis despite compliance with capital requirements.
A recent research by GFRI's Professor Harald Hau on supervisory board competence in banks provides interesting new insights. It updates an index of supervisory board competence for a sample of German banks and compares their performance in 2023 versus 2008.
Although competence measures have improved for most banks, large gaps remain across banks and also between public-sector and private-sector banks. Bank supervisors should systematically measure, track, and report bank board competence and its alignment with a bank’s business.
The study is co-authored with Tim-Ole Radach and Marcel Thum from TU Dresden.
It was published recently in VoxEu, and in German in the IFO Schnelldienst.
Jun 26, 2024