Leverage and limited liability: a toxic cocktail
Jean-Pierre Danthine
Post-Print from HAL
Abstract:
There is little doubt that one of the main causes of the Global Crisis was excessive risk-taking by large international financial institutions. This column argues that the combination of very high leverage and limited liability continues to incentivise risky behaviour by bankers. Dealing with this problem requires the alignment of bankers' incentives with those of society, rather than of shareholders. Deferred compensation in the form of contingent convertibles presents one promising strategy.
Date: 2017-11
References: Add references at CitEc
Citations:
Published in VoxEu, 2017
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Related works:
Working Paper: Leverage and limited liability: a toxic cocktail (2017)
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:hal:journl:hal-01884330
Access Statistics for this paper
More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().