This paper focuses on the identification of the causal relationship between central banks' supervisory guidance and individual bank stability. We propose and test the hypothesis that this causal relationship is mediated by the degree to which banks comply with their central bank's corporate...

Using a sample of 595 firms listed in the capital markets of Argentina, Brazil, Chile, Colombia, Mexico, and Peru for the period of 2000-2015, we confirm prior literature by showing that when power distribution among several large shareholders (contestability) increases, firms' financial...