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Author : John Thanassoulis
Publisher :
ISBN 13 :
Total Pages : 40 pages
Book Rating : 4.:/5 (932 download)
Download or read book Bankers' Pay and Excessive Risk written by John Thanassoulis and published by . This book was released on 2015 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Claire A. Hill
Publisher : University of Chicago Press
ISBN 13 : 022629319X
Total Pages : 256 pages
Book Rating : 4.2/5 (262 download)
Download or read book Better Bankers, Better Banks written by Claire A. Hill and published by University of Chicago Press. This book was released on 2015-10-19 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: Taking financial risks is an essential part of what banks do, but there’s no clear sense of what constitutes responsible risk. Taking legal risks seems to have become part of what banks do as well. Since the financial crisis, Congress has passed copious amounts of legislation aimed at curbing banks’ risky behavior. Lawsuits against large banks have cost them billions. Yet bad behavior continues to plague the industry. Why isn’t there more change? In Better Bankers, Better Banks, Claire A. Hill and Richard W. Painter look back at the history of banking and show how the current culture of bad behavior—dramatized by the corrupt, cocaine-snorting bankers of The Wolf of Wall Street—came to be. In the early 1980s, banks went from partnerships whose partners had personal liability to corporations whose managers had no such liability and could take risks with other people’s money. A major reason bankers remain resistant to change, Hill and Painter argue, is that while banks have been faced with large fines, penalties, and legal fees—which have exceeded one hundred billion dollars since the onset of the crisis—the banks (which really means the banks’shareholders) have paid them, not the bankers themselves. The problem also extends well beyond the pursuit of profit to the issue of how success is defined within the banking industry, where highly paid bankers clamor for status and clients may regard as inevitable bankers who prioritize their own self-interest. While many solutions have been proposed, Hill and Painter show that a successful transformation of banker behavior must begin with the bankers themselves. Bankers must be personally liable from their own assets for some portion of the bank’s losses from excessive risk-taking and illegal behavior. This would instill a culture that discourages such behavior and in turn influence the sorts of behavior society celebrates or condemns. Despite many sensible proposals seeking to reign in excessive risk-taking, the continuing trajectory of scandals suggests that we’re far from ready to avert the next crisis. Better Bankers, Better Banks is a refreshing call for bankers to return to the idea that theirs is a noble profession.
Author : John E. Thanassoulis
Publisher :
ISBN 13 :
Total Pages : 37 pages
Book Rating : 4.:/5 (13 download)
Download or read book Bankers' Pay and Excessive Risk written by John E. Thanassoulis and published by . This book was released on 2018 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: If a bank might be too-big-to-fail, then shareholders' optimal compensation contract encourages the executive to risk-shift on to the taxpayer. Standard risk-reducing regulatory compensation rules -- deferred pay, equity-linked pay, debt-like instruments in pay -- do not fully correct for excessive risk-taking caused by too-big-to-fail. By contrast, clawback regulations, or equivalently the performance bond, can incentivise the executive to make society's first-best risk choices, but only if accompanied by appropriate restrictions on the curvature of pay. Without these, optimising bank shareholders can neutralise the effect of clawback on the executive's project choice by offering a bonus which is sufficiently convex in equity value.
Download or read book Regulating Bankers' Pay written by and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: "Abstract: This paper contributes to understanding the role of executive compensation as a possible cause of the current financial crisis, to assessing current legislative and regulatory attempts to discourage bank executives from taking excessive risks, and to identifying how bankers' pay should be reformed and regulated going forward. Although there is now wide recognition that bank executives' decisions might have been distorted by the short-term focus of pay packages, we identify a separate and critical distortion that has received little attention. Because bank executives have been paid with shares in bank holding companies or options on such shares, and both banks and bank holding companies issued much debt to bondholders, executives' payoffs have been tied to highly levered bets on the value of the capital that banks have. These highly levered structures gave executives powerful incentives to under-weight downside risks. We show that current legislative and regulatory attempts to discourage bank executives from taking excessive risks fail to address this identified distortion. In particular, recently adopted requirements aimed at aligning the interests of executives tightly with those of the common shareholders of bank holding companies -- through emphasizing awards of restricted shares in these companies and introducing "say on pay" votes by these shareholders -- miss the mark. The common shareholders of bank holding companies, especially now that the value of their investment has decreased considerably, would favor much more risk-taking than would be in the interest of the government as preferred shareholder and guarantor of some of the bank's obligations. Finally, having identified the problems with current legislative and regulatory attempts, we analyze how best to implement recent legislative mandates that require banks receiving TARP funding to eliminate incentives to take excessive risks. Beyond banks receiving governmental support, we put forward a new strategy for banking regulation; we argue that monitoring and regulating bankers' pay should be an important element of banking regulation in general, and we analyze how banking regulators should assess and regulate bankers' pay"--John M. Olin Center for Law, Economics, and Business web site.
Author : Simon Johnson
Publisher : Vintage
ISBN 13 : 0307379221
Total Pages : 338 pages
Book Rating : 4.3/5 (73 download)
Download or read book 13 Bankers written by Simon Johnson and published by Vintage. This book was released on 2010-03-30 with total page 338 pages. Available in PDF, EPUB and Kindle. Book excerpt: In spite of its key role in creating the ruinous financial crisis of 2008, the American banking industry has grown bigger, more profitable, and more resistant to regulation than ever. Anchored by six megabanks whose assets amount to more than 60 percent of the country’s gross domestic product, this oligarchy proved it could first hold the global economy hostage and then use its political muscle to fight off meaningful reform. 13 Bankers brilliantly charts the rise to power of the financial sector and forcefully argues that we must break up the big banks if we want to avoid future financial catastrophes. Updated, with additional analysis of the government’s recent attempt to reform the banking industry, this is a timely and expert account of our troubled political economy.
Author :
Publisher : Lulu.com
ISBN 13 : 9291316695
Total Pages : 294 pages
Book Rating : 4.2/5 (913 download)
Download or read book International Convergence of Capital Measurement and Capital Standards written by and published by Lulu.com. This book was released on 2004 with total page 294 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Alan Xiaochen Feng
Publisher : International Monetary Fund
ISBN 13 : 1484364023
Total Pages : 46 pages
Book Rating : 4.4/5 (843 download)
Download or read book Bank Competition, Risk Taking, and their Consequences: Evidence from the U.S. Mortgage and Labor Markets written by Alan Xiaochen Feng and published by International Monetary Fund. This book was released on 2018-07-06 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Bank competition can induce excessive risk taking due to risk shifting. This paper tests this hypothesis using micro-level U.S. mortgage data by exploiting the exogenous variation in local house price volatility. The paper finds that, in response to high expected house price volatility, banks in U.S. counties with a competitive mortgage market lowered lending standards by twice as much as those with concentrated markets between 2000 and 2005. Such risk taking pattern was associated with real economic outcomes during the financial crisis, including higher unemployment rates in local real sectors.
Author : Anat Admati
Publisher : Princeton University Press
ISBN 13 : 0691251703
Total Pages : 624 pages
Book Rating : 4.6/5 (912 download)
Download or read book The Bankers’ New Clothes written by Anat Admati and published by Princeton University Press. This book was released on 2024-01-09 with total page 624 pages. Available in PDF, EPUB and Kindle. Book excerpt: A Wall Street Journal, Financial Times, and Bloomberg Businessweek Book of the Year Why our banking system is broken—and what we must do to fix it New bank failures have been a rude awakening for everyone who believed that the banking industry was reformed after the Global Financial Crisis—and that we’d never again have to choose between massive bailouts and financial havoc. The Bankers’ New Clothes uncovers just how little things have changed—and why banks are still so dangerous. Writing in clear language that anyone can understand, Anat Admati and Martin Hellwig debunk the false and misleading claims of bankers, regulators, politicians, academics, and others who oppose effective reform, and they explain how the banking system can be made safer and healthier. Thoroughly updated for a world where bank failures have made a dramatic return, this acclaimed and important book now features a new preface and four new chapters that expose the shortcomings of current policies and reveal how the dominance of banking even presents dangers to the rule of law and democracy itself.
Author : Robert DeYoung
Publisher : DIANE Publishing
ISBN 13 : 1437931006
Total Pages : 57 pages
Book Rating : 4.4/5 (379 download)
Download or read book Executive Compensation and Business Policy Choices at U. S. Commercial Banks written by Robert DeYoung and published by DIANE Publishing. This book was released on 2010-08 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether and how the terms of CEO compensation contracts at large commercial banks between 1994 and 2006 influenced, or were influenced by, the risky business policy decisions made by these firms. The authors find strong evidence that bank CEOs responded to contractual risk-taking incentives by taking more risk; bank boards altered CEO compensation to encourage executives to exploit new growth opportunities; and bank boards set CEO incentives in a manner designed to moderate excessive risk-taking. These relationships are strongest during the second half of the author¿s sample, after deregulation and technological change had expanded banks' capacities for risk-taking. Charts and tables.
Author : Adrian Docherty
Publisher : John Wiley & Sons
ISBN 13 : 1118651332
Total Pages : 546 pages
Book Rating : 4.1/5 (186 download)
Download or read book Better Banking written by Adrian Docherty and published by John Wiley & Sons. This book was released on 2014-01-02 with total page 546 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why did the financial crisis happen? Why did no one see it coming? And how did our banks lose so much of our money? What's being done to sort out the banking industry? And will it work? These are the questions that industry experts Adrian Docherty and Franck Viort cover in Better Banking: Understanding and Addressing the Failures in Risk Management, Governance and Regulation. They give a clear and thorough run-through of some of the key concepts and developments in banking, to enable the reader to understand better this vital yet perilous industry. Without excessive detail or jargon, they explain the most important issues in risk management, regulation and governance and build a comprehensive description of how failings in these areas resulted in the current financial crisis. In order to make the diagnosis clear, the authors illustrate their descriptions with a series of informative case studies. The book revolves around a critique of the current regulatory developments, which the authors feel will be ineffective in fixing the structural flaws in banking. Crucially, and as the title of the book suggests, they set out their own series of proposals to contribute to the development of a better, safer and more effective banking industry. Docherty and Viort's book fills an important gap in the literature on banking and its role in the current financial crisis. It is at once a history, a primer, a critique and a manifesto. It does not take sides but works through a constructive diagnosis towards ideas that could lead to major improvements in the quality and stability of the financial world. Better Banking: Understanding and Addressing the Failures in Risk Management, Governance and Regulation is a technical yet accessible book that seeks to engage interested readers of all kinds -- students, professionals, bankers and regulators but also politicians and the broader audience of citizens outside the banking industry, who are keen to inform themselves and understand what needs to be done to avoid a repeat of this crisis.
Author : Maxim Hohmann
Publisher : Anchor Academic Publishing
ISBN 13 : 3960675755
Total Pages : 55 pages
Book Rating : 4.9/5 (66 download)
Download or read book The impact of regulation on remuneration in banks. An analysis of EU, UK and German law written by Maxim Hohmann and published by Anchor Academic Publishing. This book was released on 2017-02-09 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: The excessive risk-taking at banks might account for the failure of financial undertakings, as well as to systemic problems in the European Union and around the world. The inappropriate design of remuneration systems in many financial institutions is reported to induce such risk-taking. The EU regulators have intervened through legislative measures which have been differently implemented in Member States. Such legislative measures face critics due to the restriction in banks’ freedom of business. However, this book will point out that regulations are necessary and can be justified in order to protect the common good of a sound functioning financial market. Nevertheless, the effectiveness of current legislative provisions is challenged. Therefore, this book will critically analyse the legislation of bankers’ remuneration, focussing on relevant EU, UK and German measures.
Author : Emilios Avgouleas
Publisher :
ISBN 13 :
Total Pages : 46 pages
Book Rating : 4.:/5 (13 download)
Download or read book Excessive Leverage and Bankers' Pay written by Emilios Avgouleas and published by . This book was released on 2015 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Debt has traditionally been viewed as an effective corporate governance tool. On the other hand, high leverage levels can lead to rapid expansion of the size of bank assets maximizing, in the short-to-medium term, banks return on equity. In the absence of regulatory controls on leverage, all it takes to assume excessive risks, even for benign bankers, is to imitate competitor business strategies. This form of herding can be motivated by compensation considerations or by career concerns. However, while bankers' compensation has been a major factor behind bank short-termism, excessive leverage creates serious governance/agency costs even in the absence of compensation incentives. Therefore, a reasonably protective leverage ratio can prove an effective measure in containing rent seeking and smoothing up the leverage cycle to improve bank governance, prevent deep recessions, and safeguard financial stability.
Author : Jay Cullen
Publisher : Edward Elgar Publishing
ISBN 13 : 1782549293
Total Pages : 259 pages
Book Rating : 4.7/5 (825 download)
Download or read book Executive Compensation in Imperfect Financial Markets written by Jay Cullen and published by Edward Elgar Publishing. This book was released on 2014-10-23 with total page 259 pages. Available in PDF, EPUB and Kindle. Book excerpt: This important book discusses the issue of executive compensation in Anglo-American financial markets following the financial crisis. The book begins by contextualizing the problem facing financial institutions in the US and the UK and argues that appr
Author : Peter Hoflich
Publisher : John Wiley & Sons
ISBN 13 : 047082722X
Total Pages : 249 pages
Book Rating : 4.4/5 (78 download)
Download or read book Banks at Risk written by Peter Hoflich and published by John Wiley & Sons. This book was released on 2012-11-28 with total page 249 pages. Available in PDF, EPUB and Kindle. Book excerpt: Ideas on how to reform the financial services industry, from experts on the inside In the wake of the financial crisis of 2008 the practices of the entire global financial services industry have been called into question. From the government, to the media, to the general public, everyone is re-thinking the way forward for the financial sector, but the stakes are high. Should negative trends in the industry continue and financial innovations allow fallout from the next crisis to grow exponentially, the endgame could be the sort of mutually assured destruction that topples entire economies. Charting the way forward for financial services reform requires a fundamental reappraisal of how things are done in order to avert disaster in the near future, and Banks at Risk: Global Best Practices in an Age of Turbulence explores what the future holds, by talking to experts in the know. Compiling the insights of ten key figures in the financial services industry—regulators, commercial bankers, risk managers, and infrastructure specialists—who look at both strategic and operational issues in their assessments of how to clean up the industry and move towards a system of properly-managed risk, the book explores exactly what we need to do to prevent another crisis. Sharing their thoughts for the first time are Liu Mingkang, the Chairman of the China Banking Regulatory Commission; Eric Rosengren, President of the Federal Reserve Bank of Boston; Joel Werkama, Assistant Vice President of the Federal Reserve Bank of Boston; Jane Diplock, former chairperson of the International Organization of Securities Commissions and the former head of New Zealand’s securities commission; Jose Maria Roldan, head of the banking supervision at the Bank of Spain; Jesus Saurina, Director of the Financial Stability Department at the Bank of Spain; Dick Kovacevich, former chairman and CEO of Wells Fargo Bank; Mike Smith, CEO of ANZ Group and former head of HSBC’s Asia Pacific operations; Shan Weijian, Chairman and CEO of Pacific Alliance Group and former senior partner of TPG Capital; Rob Close, former CEO of CLS Group; Tham Ming Soong, Chief Risk Officer at the United Overseas Bank in Singapore; and Tsuyoshi Oyama, former head of the risk assessment division in the international affairs division of the Bank of Japan. Takes a unique look at the problems with the financial services industry and what can be done to fix them Brings together ideas for reform from numerous internationally respected figures working in the industry, many of them writing about their solutions for the first time Offers a remarkable insight into how to build a more sustainable future Eminently thought provoking, Banks at Risk presents real solutions to reforming the financial services industry, from the men and women who know it best.
Download or read book How to Fix Bankers' Pay written by and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: "Abstract: This essay -- written for a special issue of the American Academy of Arts and Sciences' Daedalus journal on lessons from the financial crisis -- discusses how bankers' pay should be fixed. I describe two distinct sources of risk-taking incentives: first, executives' excessive focus on short-term results; and, second, their excessive focus on results for shareholders, which corresponds to a lack of incentives for executives to consider outcomes for other contributors of capital. I discuss how pay arrangements can be reformed to address each of these problems and conclude by examining the role that government should play in bringing about the needed reforms. The essay provides an accessible summary of the analysis developed in Bebchuk and Fried, "Paying for Long-Term Performance;" (University of Pennsylvania Law Review, 2010) and Bebchuk and Spamann, "Regulating Bankers' Pay;" (Georgetown Law Journal, 2010)"--John M. Olin Center for Law, Economics, and Business web site.
Author : Jonathan McMillan
Publisher : Zero/One Economics Gmbh
ISBN 13 : 9783952438503
Total Pages : 248 pages
Book Rating : 4.4/5 (385 download)
Download or read book The End of Banking written by Jonathan McMillan and published by Zero/One Economics Gmbh. This book was released on 2014 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this thought-provoking book, Jonathan McMillan dissects banking to reveal its inner workings. He cuts through the complexity of modern finance and explains how banking almost crashed our financial system. Banking is broken, and McMillan reveals why we can no longer fix it. The digital revolution turns out to be the game changer that calls for the end of banking. But McMillan refrains from merely pointing out flaws. Building on economic research and a rigorous analytical approach, he goes on to provide an innovative blueprint for a modern financial system. The End of Banking transforms our understanding of the financial system. It identifies the root cause of today's problems with banking and presents a solution that stands out against existing reform proposals.
Author : Mr.Thierry Tressel
Publisher : International Monetary Fund
ISBN 13 : 1498338550
Total Pages : 61 pages
Book Rating : 4.4/5 (983 download)
Download or read book Optimal Prudential Regulation of Banks and the Political Economy of Supervision written by Mr.Thierry Tressel and published by International Monetary Fund. This book was released on 2014-05-28 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: We consider a moral hazard economy in banks and production to study how incentives for risk taking are affected by the quality of supervision. We show that low interest rates may generate excessive risk taking. Because of a pecuniary externality, the market equilibrium may not be optimal and there is a need for prudential regulation. We show that the optimal capital ratio depends on the macro-financial cycle, and that, in presence of production externalities, it should be complemented by a constraint on asset allocation. We show that the political process tends to exacerbate excessive risk taking and credit cycles.
