Graduation Year

2024

Date of Submission

9-2024

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Murat Binay

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Terms of Use for work posted in Scholarship@Claremont.

Abstract

This thesis explores the impact of shareholder activism on the strategic financial decisions that banks make, particularly with their use the Federal Reserve’s Term Auction Facility. By examining the interplay between shareholder demands and bank management’s responses to liquidity crises, this study aims to delve into the mechanics of how shareholder activism influences banks’ decisions to seek emergency liquidity. By utilizing a blend of theoretical frameworks and empirical analyses, this research focuses on the 2007-2009 financial crisis to assess the effectiveness of shareholder activism in shaping banks’ approaches to managing their liquidity risk. The findings of this study aim to contribute to the broader understanding of corporate governance in the financial sector by highlighting the role of activist shareholder in steering banks towards more conservative and stability-focused strategies during economic downturns.

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This thesis is restricted to the Claremont Colleges current faculty, students, and staff.

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