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CEO risk-taking incentives and bank failure during the 2007-2010 financial crisis

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dc.affiliation.dptoUC3M. Departamento de EconomĂ­a de la Empresaes
dc.contributor.authorBoyallian, Patriciaes
dc.contributor.authorRuiz-VerdĂș, Pabloes
dc.contributor.editorUniversidad Carlos III de Madrid. Departamento de EconomĂ­a de la Empresaes
dc.date.accessioned2015-03-16T15:47:57Zes
dc.date.accessioned2015-04-07T08:11:20Z
dc.date.available2015-04-07T08:11:20Z
dc.date.issued2015-03es
dc.description.abstractWe propose a simple measure of the risk-taking incentives of the CEOs of highly levered financial institutions, levered delta, which captures the incentives to take on risk generated by CEOs' stock holdings. Using this measure, we find that stronger CEO risk-taking incentives prior to the 2007-2010 financial crisis are associated with a higher probability of bank failure during the crisis. We find no evidence that risk-taking incentives or bank failure are related to corporate governance failures. However, CEOs' risk-taking incentives appear to be aligned with shareholders' incentivesto shift risk to other claim holders.en
dc.description.sponsorshipThe authors acknowledge the financial support of Spain's Ministry of Science and Innovation (through research grant ECO2009-08278), Spain's Ministry of Economy and Competitiveness (through grant ECO2012-33308) and of FundaciĂłn UCEIF (through a Santander Financial Institute (2013) research grant.)en
dc.format.mimetypeapplication/pdf
dc.identifier.issn2387-175Xes
dc.identifier.repecwb1501
dc.identifier.urihttps://hdl.handle.net/10016/20279
dc.identifier.uxxiDT/0000001349es
dc.language.isoenges
dc.relation.ispartofseriesUC3M Working Papers Businessen
dc.relation.ispartofseries15-01es
dc.relation.projectIDGobierno de España. ECO2009-08278
dc.relation.projectIDGobierno de España. ECO2012-33308
dc.rightsAtribución-NoComercial-SinDerivadas 3.0 España
dc.rights.accessRightsopen access
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.otherExecutive compensationen
dc.subject.otherRisk-taking incentivesen
dc.subject.otherLeverageen
dc.subject.otherRisk shiftingen
dc.subject.otherBank governanceen
dc.subject.otherFinancial crisisen
dc.titleCEO risk-taking incentives and bank failure during the 2007-2010 financial crisisen
dc.typeworking paper*
dspace.entity.typePublication
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