RT Generic
T1 CEO risk-taking incentives and bank failure during the 2007-2010 financial crisis
A1 Boyallian, Patricia
A1 Ruiz-Verdú, Pablo
A2 Universidad Carlos III de Madrid. Departamento de Economía de la Empresa, 
AB We 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.
SN 2387-175X
YR 2015
FD 2015-03
LK https://hdl.handle.net/10016/20279
UL https://hdl.handle.net/10016/20279
LA eng
NO The 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 Fundación UCEIF (through a Santander Financial Institute (2013) research grant.)
DS e-Archivo
RD 22 jun. 2024