The Determinants of Reputational Risk in the Banking Sector

Posted: 27 Jul 2011

See all articles by Franco Fiordelisi

Franco Fiordelisi

University of Essex - Essex Business School; University of Rome III, Italy

Maria-Gaia Soana

University of Parma

Paola Schwizer

University of Parma

Date Written: July 26, 2011

Abstract

What determines reputational loss following operational losses in banking? The purpose of this paper is to empirically address this question. We estimate the reputational risk for a large sample of banks in Europe and the U.S. between 2003 and 2008. We have two main results. First, we provide evidence that there is the probability of reputational damage increases as profits and size increase. Second, we show that a higher level of capital invested and intangibles reduce the probability of reputational damage.

Keywords: reputational risk, operational losses, financial companies, event study

JEL Classification: G14, G21

Suggested Citation

Fiordelisi, Franco and Soana, Maria-Gaia and Schwizer, Paola, The Determinants of Reputational Risk in the Banking Sector (July 26, 2011). Available at SSRN: https://ssrn.com/abstract=1895327 or http://dx.doi.org/10.2139/ssrn.1895327

Franco Fiordelisi (Contact Author)

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

University of Rome III, Italy ( email )

Via Silvio D'amico, 77
Rome, Rome 00145
Italy

HOME PAGE: http://host.uniroma3.it/docenti/fiordelisi/?home

Maria-Gaia Soana

University of Parma ( email )

Via Kennedy 6
Parma, 43100
Italy

Paola Schwizer

University of Parma ( email )

Via J.F. Kennedy 6
Parma, 43100
Italy

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