Publication Type
Journal Article
Version
submittedVersion
Publication Date
4-2025
Abstract
Does the early-career exposure of bank CEOs to the 1980s savings and loans (S&L) crisis affect the outcomes of banks they subsequently managed? We measure the S&L crisis exposure by the bank failure rate in the states where CEOs worked during the S&L crisis. Armed with this measure, we find that banks managed by CEOs with higher S&L crisis exposure took on less risk and that these banks better survived the financial crisis of 2008. In particular, CEOs adjusted risk attitudes in areas causing the S&L crisis: their more intense crisis experience reduced banks’ interest rate risk, exposure to risky financial innovation and credit risk. We establish the causal interpretation of the findings by evaluating the impact of crisis exposure via CEO hometown states and exploiting quasi-exogenous turnovers due to CEO retirement. Overall, CEOs learned from the past industry crisis which helped curtail their institutions’ risk exposures and enhance later crisis performance.
Keywords
Bank Risk Management, Bank CEOs, Experience, Financial Crises, Learning
Discipline
Finance and Financial Management | Human Resources Management | Leadership Studies
Research Areas
Finance
Publication
Journal of Financial Economics
Volume
166
First Page
1
Last Page
21
ISSN
0304-405X
Identifier
10.1016/j.jfineco.2025.104009
Publisher
Elsevier
Citation
YU, Yang.
Do bank CEOs learn from crisis experiences?. (2025). Journal of Financial Economics. 166, 1-21.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7684
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.jfineco.2025.104009
Included in
Finance and Financial Management Commons, Human Resources Management Commons, Leadership Studies Commons
