The following information was submitted:
Transactions: WSEAS TRANSACTIONS ON MATHEMATICS
Transactions ID Number: 89-640
Full Name: Jyh-Jiuan Lin
Position: Professor
Age: ON
Sex: Female
Address: 151 Ying-Chuan Road, Tamsui, Taipei County 251
Country: TAIWAN
Tel: 886-2-2621-5656 ext 2878
Tel prefix:
Fax: 886-2-2620-9730
E-mail address: 117604@mail.tku.edu.tw
Other E-mails: jjlinster@gmail.com
Title of the Paper: modeling put-option margin and default risk when labor has a voice in bank governance mechanism
Authors as they appear in the Paper: Chuen-Ping Chang, Jyh-Jiuan Lin, Jeng-Yan Tsai
Email addresses of all the authors: cpchang@cc.kuas.edu.tw, 117604@mail.tku.edu.tw, tsaijy@mail.tku.edu.tw
Number of paper pages: 11
Abstract: Although considerable research effort has been put toward modeling governance mechanisms for the purpose of valuing investment decisions written on them, little attention has been paid to the effects of governance mechanisms by labor voice on bank operations management. Like entrenched operations management, entrenched labor cannot be gotten rid of easily. This paper demonstrates how labor voice determines the optimal bank interest margin and default risk decisions. Our model is based on a regime giving corporate governance power to current labor and then labor¡¦s objective is equivalent to minimizing the equity value of the put option. We show that the governance voice pushes bank interest margin determination toward shareholder value maximization. However, an opportunity cost of bank governance from listening labor voice is increasing the bank¡¦s default risk in equity returns.
Keywords: Bank Interest Margin, Default Risk, Labor Voice, Put Option
EXTENSION of the file: .doc
Special (Invited) Session: Modeling Put-Option Margin and Default Risk When Labor Has a Voice in Bank Governance Mechanism
Organizer of the Session: 634-520
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