Corporate Governance Index and Financial Stability Moderating Role of Bank Size: Empirical Evidence from Banks of Pakistan

Abstract

This study examines how bank size moderates the corporate governance index-traditional financial stability relationship. This analysis included data from all 20 SBP-registered banks. First, corporate governance and bank health were examined independently. Second, this study examines the corporate governance index and monetary security. Third, the paper examines how corporate governance index and bank size affect Pakistan's banking safety and soundness. The generalized method of moments (GMM) was used to study variable correlation. Rodmen suggested generalized method of moments for endogeneity (GMM). This research found that having an audit committee, yearly meetings, and a CEO who reports to the board improves a company's financial security. Larger banks have less stable boards, yet the positive correlation between bank size and the corporate governance index enhances the link between governance and financial security