The moderating effect of CEO power on the relationship between banking system fragility and interest rate divergence

اقتصاد پولی مالی

Article 4, Volume 30, Issue 26, July 2023, Pages 104-133   

Document Type: Original Article

DOI: 10.22067/mfe.2023.80993.1280

Author

simin rajizadeh^*

Scientific member of Accounting Department, Faculty of Management, Economics and Accounting, Payam Noor University, Tehran

Abstract

The amount of power of the CEO for macro decisions of an organization can have a direct impact on its performance. The purpose of this research is to investigate the moderating effect of the CEO's power on the relationship between the fragility of the banking system and interest rate divergence. To collect data, the reports of the board of directors of banks and credit institutions on the website of Tehran Stock Exchange Company and their financial statements were used with the help of Steta software. The statistical population of this research includes 30 banks and credit institutions admitted to the Tehran Stock Exchange on an annual basis in the period of 2017-2022. Based on the results of the first model, the fragility intensity coefficient of the banking system has a significant positive effect on the interest rate divergence. In the second model, the coefficient of fragility of the banking system on interest rate divergence decreased when the moderating variable of CEO power was added. In the third model, when the moderating variable of the CEO's power and the interaction effect of the CEO's power on the fragility of the banking system were added, the intensity of the fragility of the banking system on the interest rate divergence decreased. The research results indicate that the CEO's power reduces the effect of bank fragility on interest rate divergence.

Keywords

interest rate divergence; bank fragility; CEO power

References