The global financial sector recently suffered from two interrelated crises: the credit crisis and the sovereign debt crisis. A common question is whether there, for the sovereign debt crisis, has been any lessons learnt from the credit crisis. We address this question by utilizing a large set of characteristics: bank governance characteristics, bank characteristics, as well as country and
... [Show full abstract] regulatory characteristics, to study for differences in their relation to bank risk, profitability, and asset quality in the two crises. With a unique hand-collected data on 378 large global banks, we find that smaller boards are related to significantly less idiosyncratic risk in the latter crisis. CEO power is significantly stronger related to insolvency and systematic risk, but less to idiosyncratic risk, in the sovereign debt crisis. We also e.g. find that deposits and loans had significantly different relationships to bank performance and nonperforming loans during the two crises.