We provide new evidence that the systemic risk of large banks is higher when the external and internal corporate governance mechanisms complement each other. Using a sample of large European banks from 2000 to 2016, we examine the relationship between various internal and external corporate governance mechanisms and the level of systemic risk. Specifically, we analyze how monitoring by institutional investors complements or substitutes various board-level governance mechanisms in determining systemic risk of a bank. Our empirical findings show that external (institutional ownership) and internal (board level) governance mechanisms complement each other to determine the level of systemic risk of a sample of domestic systemically important banks. Our results are robust to the alternative systemic risk measures and additional controls. We conclude that banks have strategic flexibility in terms of configuring their corporate governance structures to attain similar levels of systemic risk.

我们提供了新的证据，表明内部和外部公司治理机制相辅相成时，大型银行的系统风险会更高。我们使用2000年至2016年间大型欧洲银行的样本，研究了各种内部和外部公司治理机制与系统风险水平之间的关系。具体来说，我们分析机构投资者的监控如何确定银行的系统性风险，以补充或替代各种董事会级别的治理机制。我们的经验发现表明，外部（机构所有权）和内部（董事会一级）治理机制相辅相成，以确定国内具有系统重要性的银行样本的系统风险水平。我们的结果对于替代性系统性风险衡量和其他控制措施是可靠的。