The Governance of Perpetual Financial Intermediaries

e-Archivo Repository

Show simple item record Penalva, José S. Van Bommel, Jos 2022-05-09T18:28:01Z 2022-05-09T18:28:01Z 2016-12-13
dc.identifier.bibliographicCitation Penalva, J., & van Bommel, J. (2017). The Governance of Perpetual Financial Intermediaries. Journal of Institutional and Theoretical Economics, 173 (3), pp. 498-522.
dc.description.abstract In this paper we re-examine the risk sharing potential of inter- generational financial intermediaries taking into account their governance structure. We argue that asset buffers of perpetual institutions are limited by the temptation of the living stakeholders to renegotiate contributions and distributions. We characterize the renegotiation constraint and show that it severely limits intergenerational risk sharing. Without renegotiation frictions, intermediaries cannot provide higher welfare than a market. The existence of (self-imposed) renegotiation costs relaxes the constraint. By forming a single monopolist intermediary, agents can further improve welfare.
dc.language.iso eng
dc.publisher Mohr Siebeck
dc.rights © Mohr Siebeck
dc.title The Governance of Perpetual Financial Intermediaries
dc.type article
dc.subject.jel G21
dc.subject.jel D91
dc.rights.accessRights openAccess
dc.type.version acceptedVersion
dc.identifier.publicationfirstpage 498
dc.identifier.publicationissue 3
dc.identifier.publicationlastpage 522
dc.identifier.publicationtitle Journal of Institutional and Theoretical Economics
dc.identifier.publicationvolume 173
dc.identifier.uxxi AR/0000018924
dc.affiliation.dpto UC3M. Departamento de Economía de la Empresa
 Find Full text

Files in this item

*Click on file's image for preview. (Embargoed files's preview is not supported)

This item appears in the following Collection(s)

Show simple item record