Misconduct risk in banking services: Does a propensity to be sanctioned exist?

Litigation against a bank is indicative of misconduct risk because it suggests a failure to process customer complaints. This study examines the relationship between certain bank features and potential and actual misconduct based on a panel of complaints submitted to the Italian ombudsman. We find t...

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Bibliographic Details
Published in:International review of financial analysis 2022-05, Vol.81, p.102081, Article 102081
Main Authors: Del Gaudio, Belinda L., Salerno, Dario, Sampagnaro, Gabriele, Verdoliva, Vincenzo
Format: Article
Language:English
Subjects:
Bank-customer litigation
Financial stability
Misconduct risk
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Summary:Litigation against a bank is indicative of misconduct risk because it suggests a failure to process customer complaints. This study examines the relationship between certain bank features and potential and actual misconduct based on a panel of complaints submitted to the Italian ombudsman. We find that bank profits and financial health are strong determinants of potential and actual illegal behaviour, respectively. We control for the level of bank-client contentiousness at the national level and bank size and provide some implications for regulators.
ISSN:1057-5219
1873-8079
DOI:10.1016/j.irfa.2022.102081