Arbeitspapier
Bank bonuses and bail-outs
This paper shows that bonus contracts may arise endogenously as a response to agency problems within banks, and analyzes how compensation schemes change in reaction to anticipated bail-outs. If there is a risk-shifting problem, bail-out expectations lead to steeper bonus schemes and even more risk-taking. If there is an effort problem, the compensation scheme becomes flatter and effort decreases. If both types of agency problems are present, a sufficiently large increase in bailout perceptions makes it optimal for a welfare-maximizing regulator to impose caps on bank bonuses. In contrast, raising managers' liability can be counterproductive.
- Sprache
-
Englisch
- Erschienen in
-
Series: Preprints of the Max Planck Institute for Research on Collective Goods ; No. 2013/3
- Klassifikation
-
Wirtschaft
Compensation Packages; Payment Methods
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Financial Institutions and Services: Government Policy and Regulation
Personnel Economics: Compensation and Compensation Methods and Their Effects
- Thema
-
bonus payments
bank bail-outs
bank management compensation
risk-shifting
underinvestment
limited and unlimited liability
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Hakenes, Hendrik
Schnabel, Isabel
- Ereignis
-
Veröffentlichung
- (wer)
-
Max Planck Institute for Research on Collective Goods
- (wo)
-
Bonn
- (wann)
-
2013
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Hakenes, Hendrik
- Schnabel, Isabel
- Max Planck Institute for Research on Collective Goods
Entstanden
- 2013
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