Konferenzbeitrag
Bank Bonuses and Bail-out Guarantees
This paper analyzes how a bank shareholder optimally designs the compensation scheme of a bank manager if there are agency problems between the shareholder and the manager, and how this design changes in reaction to anticipated bail-outs. If there is a problem of excessive risk-taking, bail-out guarantees lead to steeper compensation 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 bail-out perceptions will make it optimal for a welfare-maximizing regulator to impose ceilings on bank bonuses.
- Language
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Englisch
- Bibliographic citation
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Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Causes and Consequences of Bank Bail-Outs ; No. D7-V2
- Classification
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Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Financial Institutions and Services: Government Policy and Regulation
Personnel Economics: Compensation and Compensation Methods and Their Effects
- Subject
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Bonus payments
bail-out guarantees
bank manager compensation
- Event
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Geistige Schöpfung
- (who)
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Hakenes, Hendrik
Schnabel, Isabel
- Event
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Veröffentlichung
- (who)
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Verein für Socialpolitik
- (where)
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Frankfurt a. M.
- (when)
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2010
- Handle
- Last update
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10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Konferenzbeitrag
Associated
- Hakenes, Hendrik
- Schnabel, Isabel
- Verein für Socialpolitik
Time of origin
- 2010
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Do Bank Bail-Outs cause Moral Hazard? Evidence from the Subprime Crisis
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Abolishing Public Guarantees in the Absence of Market Discipline
The ‘Celtic Crisis’: Guarantees, transparency, and systemic liquidity risk
Export Market Risk and the Role of Public Credit Guarantees
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