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Essays on Banking
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| 자료유형 | 학위논문 |
|---|---|
| 서명/저자사항 | Essays on Banking. |
| 개인저자 | Kishore, Kaushalendra. |
| 단체저자명 | University of Minnesota. Business Administration. |
| 발행사항 | [S.l.]: University of Minnesota., 2019. |
| 발행사항 | Ann Arbor: ProQuest Dissertations & Theses, 2019. |
| 형태사항 | 96 p. |
| 기본자료 저록 | Dissertations Abstracts International 81-04A. Dissertation Abstract International |
| ISBN | 9781085798181 |
| 학위논문주기 | Thesis (Ph.D.)--University of Minnesota, 2019. |
| 일반주기 |
Source: Dissertations Abstracts International, Volume: 81-04, Section: A.
Advisor: Winton, Andrew |
| 이용제한사항 | This item must not be sold to any third party vendors. |
| 요약 | This thesis consists of two essays. In the first essay I try to explain why risk managers exist and provide a reason for risk management failure. Banks rely on risk managers to prevent their employees from making high risk low value investments. Why can't the CEOs directly incentivize their employees to choose the most profitable investment? I show that having a separate risk manager is more profitable for banks and is also socially efficient. This is because there is conflict between proving incentive to choose the most profitable investment and providing incentives to exert effort on those investments. Hence, if the tasks are split between a risk manager who approves the investments and a loan officer (or trader) who exerts effort, then both optimal investment choice and optimal effort can be achieved. I further examine some reasons for risk management failure wherein a CEO may ignore the risk manager when the latter is risk averse and suggests safe investments. As is usually the case before a financial crisis, my model predicts that the CEO is more likely to ignore the risk manager when the risky investments are yielding higher profits.The second essay studies the impact of expectation of bailout of a credit insurance firm on the investment strategies of the counterparty banks. If the failure of credit insurance firm may result in the bankruptcy of its counterparty banks, then the regulator will be forced to bail it out. This imperfectly targeted time inconsistent policy incentivizes the banks to make correlated investments ex ante. All banks want their assets to fail exactly at the time when the bailout is occurring to indirectly benefit from the bailout of the insurance firm and hence they make correlated investments. I build a model in which correlated investment by banks, under priced insurance contracts and a systemically important insurance firm arise endogenously and show that while credit insurance helps in risk sharing during good times, it can also create systemic risk. I also show that putting a limit on size of insurance firm can mitigate this problem. |
| 일반주제명 | Finance. Economic theory. Economics. Public administration. Public policy. |
| 언어 | 영어 |
| 바로가기 | 
: 이 자료의 원문은 한국교육학술정보원에서 제공합니다. |
