Government guarantees, transparency, and bank risk-taking (English)

This paper presents a model of bank risk taking and government guarantees. Levered banks take excessive risk, as their actions are not fully priced at the margin by debt holders. The impact of government guarantees on bank risk taking depends critically on the portion of bank investors that can observe bank behavior and hence price debt at the margin. Greater guarantees increase risk taking (moral hazard) when informed investors hold a sufficiently...

DETAILS

Author

Cordella,Tito;

Dell'Ariccia,Giovanni;

Marquez,Robert;
Document Date
2017/02/15
Document Type
Policy Research Working Paper
Report Number
WPS7971
Volume No
1
Total Volume(s)
1
Country
World,
Region
Other,
Disclosure Date
2017/02/15
Disclosure Status
Disclosed
Doc Name
Government guarantees, transparency, and bank risk-taking
Keywords
bank risk-taking

DOWNLOADS

COMPLETE REPORT

Official version of document (may contain signatures, etc)

Official PDF
TXT*
Total Downloads** : 1468
Download Stats
*The text version is uncorrected OCR text and is included solely to benefit users with slow connectivity.

Citation

Cordella,Tito; Dell'Ariccia,Giovanni; Marquez,Robert.

Government guarantees, transparency, and bank risk-taking (English). Policy Research working paper|no. WPS 7971 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/468401487165710483

Government guarantees, transparency, and bank risk-taking (English)

DETAILS

DOWNLOADS

COMPLETE REPORT

Citation

SUBSCRIBE TO EMAIL ALERTS