WP 76 | 15 Was the Crisis Due to a Shift from Stakeholder to Shareholder Finance? Surveying the Debate

Data di pubblicazione: 17 Aprile 2015
Aree di ricerca: Teoria economica
Categorie pubblicazione: Working paper
Tags: strumenti finanziari, credito

We discuss the literature on the shift from stakeholder to shareholder finance behind the Great Financial Crisis (GFC). Traditional banks generally maximized stakeholder value (STV). But before the GFC also many of them started maximizing shareholder value (SHV). Moving from STV to SHV often meant shifting credit management from Originate-to-Hold (OTH) to Originate-to-Distribute (OTD). Moving from STV-OTH to SHV-OTD increased systemic risk damaging the common good of financial stability. STV-oriented banks seemed to weather the GFC relatively better with more heterogeneous systems proving more resilient. Heterogeneity in banking governance-orientations/ownership-structures seems to add value reducing the probability of financial crises.