Labor unions and bank risk culture: evidence from the financial crisis

Dien Giau Bui, Yan Shing Chen, Hsing Hua Hsu, Chih-Yung Lin*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Scopus citations


In this paper, we examine the effect of labor unions on bank performance during the recent financial crisis. Empirical evidence from the 314 largest global banks indicates that the stock returns and profitability of unionized banks are higher, and the default probabilities are lower than non-unionized banks. Moreover, unionized banks have lower tail risk in their stock returns, more tangible equity, more liquid assets, and better quality lending before the crisis than non-unionized banks. These finding show that unionized banks operate more conservatively and engage in less risk-taking. Our results imply that union preferences can shape the risk culture of banks.

Original languageAmerican English
Article number100782
JournalJournal of Financial Stability
StatePublished - Dec 2020


  • Default probability
  • Financial crisis
  • Labor unions
  • Risk-taking
  • Stock returns


Dive into the research topics of 'Labor unions and bank risk culture: evidence from the financial crisis'. Together they form a unique fingerprint.

Cite this