Graduation Year

2018

Date of Submission

4-2018

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Yaron Raviv

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2018 Bryan K Lynch

Abstract

The value add of gender diversity in the financial services industry has been overlooked. From providing capital for businesses to financing mortgages, it goes without question that financial institutions play a most critical role in the function of the economy. Our study poses a potential solution for managing the immense responsibility of these entities. The financial crisis of 2008 awakened the public to the high levels of risk that banks endure in the practice of their business. Banks often rely on a liquidity cushion in order to mitigate the risk of financial distress. Liquidity consists of the cash and other liquid assets that banks retain for times of unexpected demands for cash. Financial institutions often vary in their levels of liquidity due to different risk tolerances and appetites for return. This thesis contributes to existing literature by looking into the role that gender diverse boards play in managing liquidity risk and its transparent effect on bank performance. Through an analysis of seventy-four global, regional, small, mid and large cap commercial banks, we concluded that increased gender diversity results in increased liquidity and decreased risk to bank assets. In the process, we also test the effect of increased liquidity on bank performance, as it would likely be a concern for shareholders

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