Interest rates and the risk-taking incentives of bank CEOs

Jijun Niu ()
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Jijun Niu: Simon Fraser University

Economics Bulletin, 2012, vol. 32, issue 2, 1555-1570

Abstract: The risk-taking channel of monetary policy predicts a negative relationship between interest rates and the risk-taking incentives of bank CEOs. Using a sample of U.S. banks over the period 1992-2006, we provide empirical evidence consistent with this prediction. Our finding holds for both short-term and long-term interest rates.

Keywords: bank; interest rates; risk taking; managerial compensation (search for similar items in EconPapers)
JEL-codes: G2 (search for similar items in EconPapers)
Date: 2012-05-23
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Citations: View citations in EconPapers (2)

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