| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP11267
|
| DP11267 On the Economics of Crisis Contracts |
| Hans Gersbach; Volker Britz
|
| 发表日期 | 2016-05-10
|
| 出版年 | 2016
|
| 语种 | 英语
|
| 摘要 | We examine the impact of so-called "Crisis Contracts" on bank managers' risk-taking incentives and on the probability of banking crises. Under a Crisis Contract, managers are required to contribute a pre-specified share of their past earnings to finance public rescue funds when a crisis occurs. This can be viewed as a retroactive tax that is levied only when a crisis occurs and that leads to a form of collective liability for bank managers. We develop a game-theoretic model of a banking sector whose shareholders have limited liability, so that society at large will suffer losses if a crisis occurs. Without Crisis Contracts, the managers' and shareholders' interests are aligned, and managers take more than the socially optimal level of risk. We investigate how the introduction of Crisis Contracts changes the equilibrium level of risk-taking and the remuneration of bank managers. We establish conditions under which the introduction of Crisis Contracts will reduce the probability of a banking crisis and improve social welfare. We explore how Crisis Contracts and capital requirements can supplement each other and we show that the efficacy of Crisis Contracts is not undermined by attempts to hedge. |
| 主题 | Financial Economics
; Industrial Organization
; Public Economics
|
| 关键词 | Crisis contracts
Excessive risk taking
Banker's pay
Banking crises
Hedging
Capital requirements
|
| URL | https://cepr.org/publications/dp11267
|
| 来源智库 | Centre for Economic Policy Research (United Kingdom)
|
| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/540084
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推荐引用方式
GB/T 7714 |
Hans Gersbach,Volker Britz. DP11267 On the Economics of Crisis Contracts. 2016.
|
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