Risk, Reward and Bank Resilience

Charles A. E. Goodhart

Chapter 10 in The Limits of Surveillance and Financial Market Failure, 2014, pp 131-139 from Palgrave Macmillan

Abstract: Abstract Decisions are taken by human beings, not by inanimate institutions. So the determinants of the preferred risk profile of an institution, such as a bank, will be influenced primarily by the incentives facing the bank managers, with structural regulation of that bank often perceived by the managers as an obstacle to be surmounted in pursuit of their preferred risk profile. This implies, perhaps, that the functional regulation of banks should play a secondary role to a more direct concern with the incentive structure facing such bank managers, and that there should be a willingness to intervene in order to recast such incentives, should they be regarded as inappropriate.

Keywords: Limited Liability; Equity Capital; Equity Ratio; Leverage Ratio; Bank Manager (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-47147-5_10

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137471475

DOI: 10.1057/9781137471475_10

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().