We examine evidence for a systematic underperformance of state-owned banks in the current financial crisis and study if the bank losses can be traced to the quality of bank governance. For this purpose, we examine the biographical background of 593 supervisory board members of Germany’s leading banks and find a pronounced difference in the finance and management experience of board representatives across private and state-owned banks. Measures of “Boardroom Competence” are then related directly to the magnitude of bank losses in the recent subprime crisis. Our data confirms that supervisory board (in-)competence in finance is related to losses in the financial crisis. Improved bank governance is therefore a suitable policy objective to reduce bank fragility.