Bank Governance, Regulation and Risk Taking: Evidence from Tunisia

Abstract

This paper investigates the hypothesis that governance and regulation have a role in reducing bank risk. Our evidences are partially consistent with standard agency theory. Using a sample of Tunisian listed banks between 2000 and 2014, we show that bank risk is, influenced positively by ownership structure and negatively by regulation, which confirm our hypotheses. However, board independence and board size seems to have the opposite expected effect, which is largely inconsistent with findings in the prior literature.